Alibaba has laid off dozens of its employees working at its metaverse division. According to reports from Chinese media outlets, the company announced the development last Friday. With this development, it follows Tencent and ByteDance, which recently took the same action affecting their virtual reality and metaverse departments.
In its memo, the firm said the restructuring at Yuanjing, its metaverse and cloud gaming division, was necessary to optimize its business and improve efficiency. The layoffs are part of the restructuring with the firm cooling off its metaverse activities over the last few weeks.
Alibaba reiterates its commitment to metaverse apps and tools
The layoffs are predicted to impact the activities at the firm’s metaverse division in Shanghai and Hangzhou. However, the metaverse division will shift its focus on creating metaverse apps and tools. In addition, it will continue to offer services that will cater to its clientele.
Before the layoffs, Yuanjing had worked on cloud gaming projects and open-source projects like GeoLRM, focusing on 3D generation. It also worked on ViViD, a project focusing on virtual try-on technologies.
Yuanjing’s creation became necessary during the hype of the metaverse after the bull run in 2021. During the period, the division received donations to the tune of millions in yuan, hiring hundreds of staff. It was also during the period that firms like Tencent and ByteDance rushed to register trademarks in the metaverse sector, looking to level up with the rising Web3 sector.
Metaverse activities dominate the Web3 industry
During and after the Metaverse’s popularity, several US firms entered the space. For instance, Facebook rebranded, changing its name to Meta to align with the space.
Since OpenAI released ChatGPT, major companies worldwide have been interested in the artificial intelligence industry. The firm chose to downsize several aspects of its services, focusing on its AI development.
Early last year, Tencent disbanded its entire extended reality team of about 300 employees. The XR team was in charge of creating software and hardware for its metaverse industry. Internal prediction at the time said the venture was not expected to turn up immediate profits, with reports estimating 2027.
Meta division, Reality Labs also recorded a loss of over $4.4 billion. The team is in charge of developing metaverse hardware like the Quest VR headset, and other software. The division recorded a revenue of $270 million. Meta suffered a 3% drop after it released its earnings report.
Presently, metaverse coins hold a market capitalization of $6.9 billion. However, the figure is tiny compared to the market cap of the collective top 10 tokens in the crypto market, which stands at $2.1 trillion.
The post Alibaba lays off dozens as it downsizes its Metaverse division first appeared on Coinfea.