Alibaba Cloud launches comprehensive transformation plan and launches large language model 'Tongyi Qianwen'

According to news on May 23, Alibaba Cloud, a subsidiary of Alibaba Group, plans to conduct a round of organizational and personnel optimization to further improve its business strategy, organization and operations. The news comes five days before Zhang Yong, chairman of the board of directors of Alibaba Group and CEO of Alibaba Cloud Intelligence, announced that Alibaba Cloud will completely spin off from Alibaba Group and complete its listing in the next 12 months.

Multiple sources said that this optimization plan started in mid-May, and Alibaba Group just announced last year’s performance last month. Although the news about Alibaba Cloud's 7% layoffs has attracted much attention, Alibaba Cloud has responded that this is a routine optimization of organizational positions and personnel. According to a company insider, the company's layoff compensation standard is "N 1 1", and untaken annual leave and companion leave can be converted into cash.

Optimization of organization and personnel is carried out every year, and Alibaba Cloud, as an important business segment of Alibaba Group, is no exception. This optimization is seen as a move to further strengthen business strategy and improve organizational efficiency. Since Zhang Yong took over Alibaba Cloud in December last year, he has taken a number of important measures, one of which is the largest price reduction in Alibaba Cloud products in history. This price reduction is aimed at reducing the cost of cloud services and expanding market share.

According to IDC data, Alibaba Cloud has always been in the leading position in the domestic public cloud market, but in the second half of 2022, its market share fell by 4.8% compared with the same period last year. At the same time, the overall growth rate of the public cloud market has been significantly slow, and the revenue growth rate has dropped by nearly 24 percentage points year-on-year. This may be a background reason for Alibaba Cloud's optimization.

After offsetting the impact of cross-segment transactions, Alibaba Group’s cloud business revenue in the first quarter of this year fell by 2% year-on-year, with revenue of 18.582 billion yuan. In response to this situation, Alibaba Cloud launched the latest large language model "Tongyi Qianwen" in April, and plans to comprehensively transform all products to adapt to the development of the artificial intelligence era.

To sum up, Alibaba Cloud's organization and personnel optimization plan aims to further optimize business strategies, improve organizational efficiency, and adapt to changes in the current public cloud market. Alibaba Cloud will continue to strive to maintain its leading position in the field of cloud computing to provide users with better cloud services.

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