Alibaba Group has reportedly laid off dozens of employees at Metaverse affiliate Yuanjing as the hype around the sector subsides.
The news came from Alibaba-owned media outlet South China Morning Post (SCMP), but was first reported by other Chinese media outlets.
A source told SCMP that the restructuring would help increase organizational efficiency. They also assured that the multinational retailer’s Metaverse division will continue its work with a focus on Metaverse applications and tools, while also providing Metaverse-based services to customers.
Far from giving up, sentiment toward Metaverse remains positive within the Alibaba Group. Alibaba Cloud, a cloud computing company and subsidiary of Alibaba, explains on its website how the metaverse has become the “next generation of the Internet.”
“Metaverse connects people and objects in the virtual world with reality, integrating the digital world and the physical world, digital life and social life, the digital economy and the real world economy, digital assets and physical assets, and digital identity and real identity. .
“The pandemic has accelerated the advent of the metaverse. Numerous real-life scenarios are rapidly being realized online, including O2O e-commerce, remote service halls, online education, online concerts, online exhibitions, remote medical consultations, and smart manufacturing.
“Metaverse is the next generation internet based on virtual reality (VR) and augmented reality (AR).”
Collapse of the metaverse
The SCMP pointed to a report by online publication Al Jingxuanshe that layoffs had taken place at Yuanjing’s departments in Shanghai and Hanzhou.
Yuanjing previously received billions of yuan in funding for the team of about 300 people working there.
It was founded by Alibaba amid “intense hype” surrounding Metaverse in 2021, with several other major Chinese companies rushing to register Metaverse-related trademarks, including Tencent Holdings, ByteDance, Kuaishou Technology and Li Auto.
Now Alibaba is not alone in downsizing its operations. Last year, both Tencent and ByteDance reportedly took a step back from XR and VR as enthusiasm for the sector waned.
None of them are abandoning the metaverse entirely, they are simply scaling their investments to fit a more realistic view of the current space.
Companies like Apple, which seem to be at the center of the metaverse, are also accelerating their investments in the metaverse.
Switch to AI
What will all this unlocked capital be used for? SCMP believes that Alibaba’s workforce reductions are coinciding with an increase in resources being devoted to AI.
Again, this is a similar story for several companies that have business relationships with both Metaverse and AI, especially after interest in the AI sector surged when OpenAI introduced ChatGPT.
Another popular company, Meta, announced that it would shut down its AR studio Meta Spark, which allows developers to create filters for Facebook, Messenger, and Instagram, to focus on AI.
In August of this year, Meta also scrapped its high-end mixed reality headset that was supposed to compete with Apple’s Vision Pro.
Headsets that seem to have groundbreaking features from a technological standpoint often don’t get the market response that vendors had hoped for. Ray-Ban Stories is one such example.
The introduction of artificial intelligence has recently become the subject of much publicity and hype, but is becoming mainstream in various forms.