The cloud branch of Alibaba Group Holding, which offers online computing and storage services, is reducing its workforce. The most recent round of layoffs will impact about 7% of the workers who work in the cloud unit. The action is being taken as the business simplifies its operations ahead of an Initial Public Offering (IPO).
The cloud unit has begun providing severance compensation to affected staff as part of the restructuring process.
The Chinese IT giant recently revealed its plans to list IPO of four of its business units and generate money for them, including its logistics division, Cainiao.
Following a two-year regulatory onslaught on China's technology sector, the business plans to segment itself into six independent units.
Revenue for Alibaba's cloud business was $2.69 billion in the last quarter. However, this data indicates a 2% decrease from the same time previous year.