Alibaba Splits Into Six Business Units in Biggest Overhaul

The $220 billion e-commerce colossus will become a holding company and grant management and financing independence to the new enterprises

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Alibaba reaffirmed Tuesday a cost-cutting strategy to shore up the bottom line

Alibaba Group Holding Ltd. unveiled a historic business overhaul Tuesday under which the e-commerce giant will split its $220 billion business into six units with independent decision-making on financing and share sales.

The reorganization, the largest in 24 years since Jack Ma established Alibaba, will transform the enterprise into a holding company, similar to Google’s restructuring as Alphabet.

Each new business unit will have its own chief executive and board of directors and will have independence on raising capital and pursuing public share sales, according to a company statement.

The announcement coincided with the first appearance in more than a year of Alibaba’s billionaire co-founder Ma on the Chinese mainland. Ma stepped out of public sight in late 2020 and reportedly stayed abroad for the past year or so.

The government is wrapping up a two-year crackdown on China’s sprawling technology sector that took aim at everything from e-commerce to ride-hailing and online education platforms. Alibaba was caught up in the campaign and fined 18.2 billion yuan ($2.6 billion) in April 2021 for violating antitrust laws. The company lost nearly 70% of its market value since its October 2020 peak of nearly $900 billion.

The reshuffle is not a financial separation but a complete overhaul of management authority and independence, which requires support from the founding members, a person close to Alibaba told Caixin.

Alibaba CEO Daniel Zhang proposed the plan more than two years ago to increase management independence and responsibility across business segments, and the reorganization is the implementation of the plan, a source from Alibaba said.

Under the plan, six separate business groups will be created: Cloud Intelligence,