Alibaba’s E-Comm Platform Daraz to Decrease Headcount
Alibaba Group-owned Daraz Group will lay off part of its workforce, its CEO, James Dong, said in a statement Wednesday.
The South Asian e-commerce giant, founded in 2012, did not disclose how many of its employees—or what percentage of its workforce—it would be parting ways with as it pursues a “more streamlined and agile structure.”
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In his memo, Dong said the decision comes as the company, which Alibaba purchased in 2018, looks to ensure it will continue to have longevity.
“This decision was taken as a last resort. Over the past couple of years, we have worked to manage costs and improve operational efficiency substantially. Despite our efforts to explore different solutions, our cost structure continues to fall short of our financial targets,” Dong wrote. “Facing unprecedented challenges in the market, we must take swift action to ensure our company’s long-term sustainability and continued growth.”
The acting CEO only joined the company in late January, following the announcement that Bjarke Mikkelsen, the company’s founder and former CEO, would depart “for personal reasons.” Dong previously served as the CEO of Daraz’s sister company, Lazada Group.
Dong’s sentiments around “long-term sustainability” match Mikkelsen’s aspirations, which he reiterated upon his departure.
“My North Star has always been to build Daraz into a business that is strong enough to survive in our markets for the long term,” he noted in a statement in January.
This round of layoffs comes after Mikkelsen announced last year that the company would cut 11 percent of its workforce across all of its geographies.
The ex-CEO cited “a war in Europe, huge supply chain disruptions, soaring inflation, increasing taxes and removal of essential government subsidies in [Daraz’s] markets” as key reasons for the company’s decision to axe its headcount in February 2023.
At that time, Reuters reported that, prior to the layoffs, Daraz employed about 3,000 people across South Asia.
The Singapore-headquartered company has locations in Karachi, Pakistan; Colombo, Sri Lanka; Yangon, Myanmar; Kathmandu, Nepal and Dhaka, Bangladesh. The company’s announcement did not indicate whether certain geographies would be impacted more than others this time around.
Though it remains to be seen which employees will see their positions eliminated, Dong said the company will remain bullish on market growth throughout South Asia.
According to a statement from the company, it had about 15 million active shoppers in early 2023. Reuters reported that the company confirmed it now has over 30 million shoppers, 200,000 active sellers and over 100,000 brands on its marketplace.
In order to captivate that audience, Dong noted in his memo, the company will look to diversify its offerings, expand its product categories and strengthen sellers’ efficiency.
“We remain passionate and ambitious about South Asia, and are committed to maintaining our regional presence in order to continue contributing to its digital transformation,” he wrote. “Our overarching goal is to enable businesses and consumers across South Asia to reap the benefits of e-commerce.”
Daraz Group did not immediately return Sourcing Journal’s request for comment.
