Alibaba Scales Back Metaverse Plans Amid Restructuring Efforts

Alibaba Group (BABA) is pulling back on its Metaverse projects, a sector that gained significant attention in recent years. An exclusive report from the South China Morning Post indicates that the Chinese e-commerce leader is laying off numerous employees from Yuanjing, its dedicated Metaverse unit.

This restructuring aims to enhance organizational efficiency and will impact workers at Yuanjing’s offices located in Shanghai and Hangzhou. While the unit has seen investments totaling “billions of yuan,” it will shift its focus moving forward. Despite the layoffs, Yuanjing plans to continue developing metaverse applications, tools, and services for its clientele.

Yuanjing was Launched in 2021 Amid Metaverse Hype

Established in 2021, Yuanjing emerged during a time when excitement surrounding the metaverse reached its height. Alibaba invested around $60 million in Nreal, a Chinese augmented reality (AR) glasses manufacturer, as part of its metaverse endeavors. Technologies such as AR, virtual reality (VR), and mixed reality (MR) were deemed essential for accessing metaverse platforms.

Yuanjing also developed a cloud-based operating system designed to support metaverse applications, especially in video gaming and various industrial fields. This initial focus highlighted Alibaba’s ambitions to expand the uses of metaverse technologies.

Investing in BABA: Analysts Offer Strong Recommendations

Despite the recent changes, analysts are optimistic about BABA stock. Currently, it holds a Strong Buy consensus rating, with 16 buy recommendations and three holds. The stock has risen over 15% in the past year, and the average price target for BABA stands at $125.11, suggesting a potential upside of 26.3% from its present levels.

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