In an internal memo circulated on Tuesday, James Dong, the acting Chief Executive Officer of Daraz Group, the Alibaba-owned e-commerce platform, revealed the implementation of layoffs across the organization. The decision aims to establish a “more streamlined and agile structure,” responding to the evolving market dynamics, according to the memo reviewed by Reuters.
The memo, while not specifying the exact number of employees affected, expressed the company’s reluctance in bidding farewell to many valued members of the Daraz family. Daraz has chosen not to disclose the percentage or absolute figures related to the workforce reduction across its operations spanning Pakistan, Bangladesh, Nepal, Sri Lanka, and Myanmar.
Last year, Daraz informed Reuters of its employment of 3,000 individuals across its geographies. However, challenging market conditions, coupled with factors such as the Ukraine crisis, supply chain disruptions, soaring inflation, higher taxes, and reduced government subsidies, led to a workforce reduction of 11%.
“Despite our efforts to explore different solutions, our cost structure continues to fall short of our financial targets. Facing unprecedented challenges in the market, we must take swift action to ensure our company’s long-term sustainability and continued growth,” stated James Dong in the memo.
The group plans to redirect its focus towards enhancing the consumer experience by diversifying the offerings of value-for-money products, expanding product categories, and improving the operational efficiency of sellers on its platform.
James Dong, who assumed the role of acting CEO in January, succeeding outgoing CEO Bjarke Mikkelsen, emphasized the need for strategic measures to navigate the complex market landscape. Pakistan and Bangladesh stand as the group’s largest markets, as highlighted by the departing CEO Mikkelsen last year.
Established in 2012 as an online fashion retailer in Pakistan, Daraz gained prominence after its acquisition by the Chinese internet giant Alibaba in 2018. The business encompasses e-commerce, logistics, payment infrastructure, and financial services, catering to over 30 million shoppers, engaging with 200,000 active sellers and representing over 100,000 brands, according to information provided to Reuters. The decision to undertake workforce reductions comes as part of Daraz’s commitment to ensuring long-term sustainability and growth amid the evolving challenges in the e-commerce landscape.
