Why Recessions Forge Great CEOs Who Think Beyond Cost-Cutting
04/15/2025
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But the CEOs who make history in downturns aren’t the ones with the deepest cuts
March 31, 2023: On Thursday, Alibaba Group attempted is assuring its investors that its decision to overhaul its community and split into six units aimed to make the company more “nimble” with market changes.
“We believe this is permitting all of our businesses to become more agile, enhance their firm decision-making, and respond faster to business changes,” CEO Daniel Zhang told investors.
China’s regulatory crackdown on its technology companies, which has been taking business since 2020, resulted in a nearly $1 trillion wipeout of stocks of the country’s significant companies. Still, analysts told CNBC that Alibaba’s reorganization is seen as a symbol of Beijing softening that stance.
On Thursday’s call, Zhang told investors, “We have been stressing the idea and being a more agile and nimble organization for several years now,” which added that Alibaba’s board would continue to have control over its entities.
“Alibaba Group will be like a holding company that is the controlling shareholder of the firm group firm,” Zhang said. “As to control shareholders, the Alibaba board will keep control over the boards of these recent companies.”
On Thursday, shares of Alibaba listed in Hong Kong increased by almost 3% at the market open, roughly an hour following the call concluded. The stock on Wednesday closed by more than 12% and saw its best day since November 11, 2022.
Chief financial officer Toby Xu stated that Alibaba would ultimately determine entities to maintain control over.
“We will continue evaluating the strategic importance of these firms to Alibaba, and on that basis, we will also decide whether or not to continue to retain control,” Xu said. “That will be an important strategic consideration.”
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Zhang added that the firm has been working on Alibaba’s “transformation” for years and that separating the entities will lead to a shift in connection with its businesses.
“One of the significant changes will be that each of the segments within the company will each become an independently operating company; hence, the relationship between the group and business group firm will change,” Zhang said.
When asked regarding the timeline of Alibaba’s restructuring, Zhang said the “strategy and company that plan for the business groups will commence immediately.”
But the CEOs who make history in downturns aren’t the ones with the deepest cuts
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But the CEOs who make history in downturns aren’t the ones with the deepest cuts
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