Editor’s note: This article has been updated for clarity around Alibaba Group’s workforce changes. While the company has been shifting focus toward AI, the year-over-year decline in headcount was largely driven by the sale of Sun Art, as disclosed in company filings. Additional context has been included.

Alibaba Group Holding Limited’s (NYSE:BABA) workforce shrank by roughly 34% over the course of 2025, as the company offloaded parts of its offline retail portfolio while sharpening its focus on artificial intelligence.

The Chinese e-commerce and technology giant ended December with 128,197 employees, down from 194,320 a year earlier, according to an earnings report released Thursday.

Much of the reduction followed the sale of Sun Art Retail Group at the end of 2024. Around the same time, Alibaba also exited its stake in department store chain Intime. These moves significantly reduced consolidated headcount, CNBC reported on Friday.

The workforce disclosure came alongside weak financial results.

Preview Of Alibaba’s Strongest AI Model

The Jack Ma co-founded tech giant unveiled Qwen3.5-Max-Preview, its most advanced AI model to date, as it pushes to compete with global leaders. The model ranked as the top Chinese system on a major benchmarking platform and demonstrated strong performance in areas such as mathematics, SCMP reported on Friday.

The company continues to expand its Qwen model family, launch enterprise-focused tools such as the Wukong AI service, and raise cloud and storage prices to improve monetization.

Alibaba Targets $100 Billion Of AI Revenue In Five Years

Alibaba is aiming to generate over $100 billion annually from cloud and AI within five years, positioning these segments as key growth drivers. The company is investing more than $53 billion in AI infrastructure and reorganizing its business to focus on enterprise customers and AI services.

With strong demand for AI products and rising usage across its platforms, Alibaba is working to turn its expanding AI ecosystem into a major source of long-term revenue.

First Eagle views the stock as undervalued based on its AI potential. The fund believes Alibaba’s current valuation largely reflects its e-commerce business, with its AI segment offering additional upside that the market has yet to fully price in.

Price Action

BABA Price Action: Alibaba shares were down 0.56% at $124.19 at the time of publication on Friday, according to Benzinga Pro data.

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