Alibaba Group Holding Ltd. plans to dispatch about half of its investment team to six different business units that will be created after the company’s breakup, according to people familiar with the matter.
(Bloomberg) — Alibaba Group Holding Ltd. plans to dispatch about half of its investment team to six different business units that will be created after the company’s breakup, according to people familiar with the matter.
The e-commerce giant is placing about half of 70-some people from its investing arm with the newly formed arms focusing on businesses from cloud services to logistics, the people said, requesting not to be named because the matter is private.
Those units, with the exception of the core Chinese e-commerce operation, could potentially be spun off and listed in future. The decision was made so that the separate arms can continue to make deals quickly in a fast-changing environment, the people added.
A representative for the company didn’t immediately respond to requests for comment.
Alibaba has made deep cost cuts to shore up margins and offset anemic domestic growth — a sea-change for a tech deal-maker that once spent aggressively to dominate wide swaths of the country’s economy. The company has historically wielded investments as a weapon to extend its influence and safeguard its status as one of China’s largest internet firms, fending off competition from JD.com Inc. and Tencent Holdings Ltd.
The company isn’t giving up on using that route to capture future opportunities amid escalating government scrutiny on the industry. It intends to keep investing as a way to stay on top of new trends, albeit proceeding with more caution in an uncertain economic environment, one of the people added.
In March, Alibaba made the historic decision to split itself into six units covering its main businesses from cloud services to international commerce and logistics. Each unit, except for the core Taobao Tmall Commerce Group, could seek fundraising and listings.
–With assistance from Jane Zhang.
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