Alibaba reassures on founder Jack Ma’s share sale plan and moves to quash lay-off rumours in internal letter

Chief people officer Jane Jiang said in the letter the lay-offs speculation was false and the matter has been reported to the police
Jiang also sought to clarify details regarding the planned stock sale by family trust of founder and former chairman Jack Ma

Alibaba

Tracy Quin Shanghai

Published: 8:00pm, 22 Nov 2023

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Alibaba Group Holding has clarified In an internal letter the details of a plan by the family trust of founder and former chairman Jack Ma to sell shares in the e-commerce company, while also denying rumours that it plans to lay off 25,000 employees.

In a letter published on Alibaba’s intranet, chief people officer Jane Jiang said the lay-offs speculation was completely false and that the company had reported the matter to police. Alibaba owns the South China Morning Post.

“Rumours about Alibaba laying off 25,000 have spread widely in the past two days, with an invented storyline about how we have gone through human resources and even applied to the social security department for approval,” said Jiang, quashing the speculation.

Meanwhile, Jiang said founder Ma’s office signed a contract with a stock agent earlier this year to sell shares in Alibaba, and the plan was announced publicly in mid-November in accordance with related rules. Jiang explained that Ma intends to use the funds raised to support his agricultural technology and charity initiatives.

Commenting under Jiang’s post, Alibaba co-founder and chairman Joe Tsai said: “I have been with the company for almost 25 years. Alibaba has faced various doubts and challenges since the beginning, but we have persisted and overcome one difficulty after another.”

“As long as we keep an open mind and innovative mindset, we will have a chance to make Alibaba unique once again,” added Tsai.

Alibaba did not immediately respond to a request for comment.

Alibaba banks on new growth pillars after cloud spin-off stumbles

“November 16 happened to be the date to make [the planned sale] public, but the stock agent was unaware that this was also the date that the company released its financial report. This coincidence was the first reason that caused misunderstanding,” Jiang wrote in the letter.

“The [sale] price agreed in August is much higher than the current share price, so [in practice] Ma hasn’t sold any Alibaba shares. This is the second misunderstanding,” Jiang wrote. “Alibaba’s stock is very much undervalued now, so he [Ma] will not sell it.”

Ma’s office last week told the Post that the Alibaba founder remains “very positive” about one of China’s biggest technology companies, giving the market an assurance after a sell-off of the company’s shares weighed on Hong Kong’s key stock index.

The statement by the office of Ma, who retired as Alibaba chairman in 2019 but remains a major shareholder through his family trust, came after his JSP Investment and JC Properties trust units said in an overnight filing on November 16 that they planned to sell US$870 million of Alibaba shares in instalments starting on November 21.

Shares in Alibaba, the second-heaviest member on the Hang Seng Index, with a 7.6 per cent weighting, fell by almost 10 per cent in Hong Kong after the company reported financial results last week. The shares closed 1.1 per cent higher at HK$76.85 on Wednesday.

Alibaba last week announced that it would not proceed with the full spin-off of its cloud computing unit after posting 9 per cent revenue growth in its September quarter.

Ma’s office later said he remains “very positive” about the company and that the phased sale is part of a long-standing and long term “preset conditional plan to do a partial sell-down for the future that was adopted in August and it won’t lead to any reduction of [Ma’s] holding of shares for now” and “not a single share has been sold”.

Ma has full confidence in Alibaba and will continue to hold its shares, the office added.