Net earnings at Alibaba, the Chinese e-commerce giant and media owner, dropped by 50% to $3.40 billion (RMB22.7 billion) in the three months between April and June, the first quarter of its current financial year. Revenues were unchanged at $30.7 billion (RMB206 billion).

Using Alibaba’s preferred non-GAAP methodology for calculating profitability, the quarter’s net earnings still dropped by 30%, from RMB45.1 billion to RMB30.2 or $4.52 billion.

The figures, while not as awful as some analysts had predicted, added to a turbulent and uncomfortable period for an iconic company that was once one of China’s most widely admired enterprises.

“During the past quarter, we actively adapted to changes in the macro environment and remained focused on our long-term strategy by continuing to strengthen our capability for customer value creation,” said Daniel Zhang, Alibaba’s chairman and CEO in a statement on Thursday.

Alibaba’s problems are a combination of the effects of China’s slowing growth and a political pincer movement that has crushed the country’s tech sector for nearly two years. The squeeze has aimed to reduce the influence of the tech giants in Chinese people’s everyday lives and to cut Alibaba, in particular, down to size. Some commentators have called it a process of castration.

In recent months, company founder Jack Ma has announced that he is divesting all his share stakes in Alibaba and Ant Group, the financial powerhouse that he also launched. Ant has also announced that it will no longer benefit from accessing Alibaba’s client data, something that renders it a far more humdrum concern.

Softbank, the Japanese tech investment firm that has been a core investor for more than a decade, this week revealed that it has raised some $22 billion of cash from deals that will see it substantially reduce its Alibaba share stake over the coming years. To the point that Softbank may lose its seat in Alibaba’s boardroom.

That’s a humiliation for Softbank and Alibaba and a concession that Alibaba’s rehabilitation will be difficult. But the share sale comes after the market capitalizations of Alibaba, rival Tencent and the Chinese tech sector have been reduced by as much as a trillion dollars since the beginning of the government’s crackdown. (Tencent is set to report its quarterly results on Aug 17.)

And Alibaba has recently made preparatory moves to make Hong Kong the joint primary listing for its shares. That is a tacit admission that it may be forced off the New York Stock Exchange – earlier this week the company said that it had failed to comply with U.S. regulators over its auditors’ report – and move to a stock market under Beijing’s closer scrutiny.

Among the positives, video streaming platform Youku’s daily average paying subscriber base increased 15% year-over-year, though the subscription total was not disclosed. The improvement was “primarily driven by quality content and continued contribution from our 88VIP membership program,” the company said. “Youku continues to improve operational efficiency through disciplined investment in content and production capability, which resulted in narrowing of losses year-over-year for five consecutive quarters.”

Alibaba’s wider digital and media segment (which includes Youku, film production and distribution, an internet browser and film ticketing service Taopiaopiao) saw revenues drop by 10% to RMB7.23 billion (compared with RMB8.07 billion in the equivalent quarter last year). The sector’s losses deepened: its adjusted earnings deficit before interest, taxation and depreciation increased from RMB419 million to RMB630 million or $93 million.

Alibaba’s shares in Hong Kong gained 5% to HK$95 on Thursday ahead of the results announcement. In pre-market trading in New York, the ADR shares were headed upwards, by 3.4% to $100.12.

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