Alibaba Group is set to reduce its cloud arm’s employee count by 7% as part of a restructuring effort, a source familiar with the matter informed TechNode. This move aims to optimize the cloud unit as it gears up for an IPO. The Chinese e-commerce giant will provide severance packages to affected employees under the “N+1+1” scheme (N refers to the number of working years), the source revealed. The company is also facilitating internal job transfers. This decision follows Alibaba’s March announcement to divide itself into six separate business units, each with its own CEO and board. It also aligns with Alibaba’s recent decision to spin off its cloud computing unit, positioning China’s leading cloud service provider to operate independently within the next twelve months. The job cuts come shortly after Alibaba Cloud’s first-quarter financial report, which revealed a 2% year-on-year decline in revenue. [TechNode reporting]