Alibaba, the Chinese internet giant, is set to reduce its workforce by approximately 7% as it prepares for separate IPOs across its diverse business groups. As part of its restructuring, affected employees in the Cloud division are being informed about impending layoffs.

The company plans to offer severance packages to impacted staff and relocate some individuals to other areas within its business verticals. With over 235,000 employees as of March, Alibaba’s recent move follows CEO Daniel Zhang’s announcement regarding the restructuring of the Cloud division.

In an earlier statement, Alibaba disclosed its intention to divide the company into six business units, each exploring fundraising or IPO opportunities.

These units encompass the Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics Group, Global Digital Commerce Group, and Digital Media and Entertainment Group.

Led by their respective CEOs and boards of directors, the restructuring follows Alibaba’s previous reduction of 10,000 employees in August 2022, driven by cost-cutting measures amid sluggish sales and a slowing economy in China.