In a recent move that has been overwhelmingly praised by investors, Alibaba Group Holding decided to break its $257 billion corporate empire into six independently-run divisions. However, inside the company, some workers are concerned about the future of less lucrative areas and job security.

Company Reorganization

The Hangzhou, China-based digital behemoth revealed last week its intention to reorganize the company into six separate divisions, each with its own CEO and budget. Based on a South China Morning Post (SCMP) report, the departments include areas like cloud computing, Chinese business, smart logistics, local services, international trade, and the media and entertainment industries.

In a video that went viral last week, Alibaba CEO Daniel Zhang Yong compared the situation to a family. He stated, "When the kids are grown, they need to leave home to face the market by themselves."

The CEO added, "I hope there will be multiple listed companies emerging from the Alibaba system and that they will continue to nurture their own sons and daughters and cultivate more listed companies."

Both the New York and Hong Kong stock markets saw a sharp increase in Alibaba's share price after the news of the proposal to restructure.

Then again, other workers give off a more pessimistic impression.

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Employee Concerns

One non-e-commerce worker at Alibaba, who asked not to be named due to the topic's sensitive nature, told SCMP that several colleagues had begun worrying about how prospective customers and business partners would see the shift.

According to this source, the team might stand to lose some of the influence it now has in the industry owing to the Alibaba brand if and when the group decides to go off on its own.

The individual added that the domestic commerce section, which provided most of Alibaba's income, may benefit from the restructuring. Still, workers might feel less connected to the company as a whole due to being split off into a smaller organization.

Scott Kessler, global sector head at business consultant Third Bridge, estimates that almost two-thirds of Alibaba's recent income came from e-commerce in China. Meanwhile, the other five businesses each earned 3% to 8% of the group'sgroup's revenues.

Another employee who works in the middle office at Alibaba, also on the condition of anonymity, voiced worry about job losses due to the company's plans to "lighten" its middle and back office duties, as announced by CEO Zhang.

After a legislative crackdown and a weakening economy in China in 2022, Alibaba laid off about 20,000 employees in an effort to simplify operations and reduce expenses.

An anonymous staff expressed concern that dissolving Alibaba into separate entities would not help the company overcome its present difficulties.

Someone mentioned that communication and cooperation between teams had been strained and that the proposed restructuring might make things considerably worse.

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