Under the influence of the epidemic and slow economic growth, Alibaba’s second-quarter earnings report showed its first negative growth in quarterly revenue since its listing in the United States, and net profit halved.

On August 4, Alibaba sales were about $30.5 billion for the second quarter, an annual decrease of 0.09%, mainly due to a 1% decline in China’s commercial segment revenue. It’s the first time Alibaba has experienced negative quarterly revenue growth since its listing on the U.S. stock ADS in September 2014.

In the second quarter, Alibaba’s net profit declined by about 50% to about $3.4 billion. Alibaba said that profits were mainly affected by the epidemic lockdown.

The report also shows the primary Chinese retail business revenue declined by 2% to around $20 billion; international retail business revenue fell by 3% to about $1.5 billion. However, income is partially offset by a 10% increase in cloud business revenue of around $2.6 billion.

Zhang Yong 張勇, chairman of Alibaba, said that the growth rate of the business slowed down in April and May, but it saw signs of improvement in June.

Xu Hong 徐宏, Chief Financial Officer, said that despite the challenges brought about by the epidemic, the company’s annual revenue performance was stable. Alibaba has tried to cut costs, narrowing losses in key strategic businesses.

Alibaba’s results marked a slowdown in growth compared to last year. Zhang Yong said, “This was a result of multiple factors, including slowing macroeconomic activities, the decline in revenue from the top internet customers, softening demand from China’s internet customers, and a delay in parts of our hybrid cloud projects due to the impact of Covid.”

Recently, nearly 10,000 employees left Alibaba during the June quarter, trimming the company’s overall personnel to 245,700. The reduced payroll reflects Alibaba’s  renewed efforts to cut expenses and increase efficiency as the company faces a slowing economy in China.

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