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China-based e-commerce giant Alibaba has grown “too quickly” and has no plans to bring on more employees in 2015, according to CEO Jack Ma.
In a speech given last week but posted to Alibaba’s messaging app Laiwang on Wednesday, Ma committed to not raising his company’s headcount in all of 2015, saying Alibaba “has really developed too quickly” and adding that “when one (employee) leaves, we’ll bring one in.” Ma didn’t say what his plans might be for 2016. Reuters reported Ma’s remarks.
Alibaba has been growing in leaps and bounds. The company said in January that it had more than 34,000 employees at the end of 2014, up 63 percent compared with the prior year. The added staff has come aboard as Alibaba has made a number of new investments across several industries — including big data, cloud computing and logistics — to continue building out its business beyond the e-commerce core.
Just this month, Alibaba announced that it’s getting into the automobile and to capitalize on a growing demand for vehicles in China and to get out of ahead of what’s becoming a rapid expansion of products, like electrical appliances, that are now getting Internet access. That announcement came just a couple of months after Alibaba announced it had acquired a minority stake in smartphone maker Meizu. Alibaba has also talked up its plans for international expansion, saying that it would partner with companies like Amazon in the US to expand its offerings.
Growth doesn’t appear to be a major financial concern for Alibaba. All the way back in 2011, the company generated a profit of 1.2 billion yuan ($193.6 million) on 11.9 billion yuan in revenue. During its last full fiscal year, ended March 31, 2014, Alibaba’s revenue was up to 52.5 billion yuan and its profit soared to 23.3 billion yuan. The company is expected to post even higher financials for its 2015 fiscal year, when it announces them next week.
But looking at those numbers is just part of the story, if Ma is to be considered. He said earlier this year that he was disappointed in his company’s 2014 performance. He also said he wouldn’t provide employees with bonuses for the Lunar New Year, despite doing so for the last several years.
Ma’s reservations come after a year marked by the company’s massive $25 billion IPO, which put the Alibaba name on the map in the US. However, in February, Ma said his company could not be overcome by its “illusory fame” and continue to grow. His hiring freeze seems to follow on his plans to ratchet back and objectively evaluate his business. Indeed, in his statement last week, Ma said Alibaba must “get into formation,” alluding to the fact that he believes his company must stop growing so quickly and gain better control over what it’s doing right now.
So far, shareholders seem to be agreeing with Ma’s assessment. The company’s shares are down nearly 21 percent, to $82.47, so far this year. Shares are down 3 percent following news of Ma’s hiring freeze.
Alibaba did not immediately respond to a request for comment.
