Alibaba Group Holding is scaling down its metaverse operations, according to a source familiar with the matter, making it the latest Big Tech company to pull back resources from the once-popular sector.

Dozens of employees at Yuanjing, the metaverse unit of e-commerce giant Alibaba, have been laid off, as part of a restructuring that aims to optimise and improve efficiency in the organisation, the source said.

The lay-offs, which were first reported by Chinese media on Friday, affected Yuanjing’s operations in both Shanghai and Hangzhou, capital of eastern Zhejiang province. Yuanjing, which had received “billions of yuan” in investment, previously employed a few hundred workers, according to a report by online news outlet AI Jingxuanshe.

The source, however, said the Alibaba unit will continue to exist, with a focus on metaverse applications and tools, as well as providing metaverse-based services to customers.

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