KUALA LUMPUR – Troubled e-commerce giant Lazada’s Indonesia branch has laid off more than half of its workforce in certain departments, while other sections saw a complete termination of all employees.
According to the Jakarta Globe, this came as Lazada implemented recent undisclosed lay-offs affecting its workforce across six countries, despite securing US$1.8 billion (RM8.3 billion) in funding last year.
An anonymous employee told the news site that the lay-offs reached C-level executives in Singapore, Indonesia, Malaysia, the Philippines, Thailand and Vietnam.
“Human resources, marketing and commercial operations will now fall under the supervision of the company’s regional executives,” the source was quoted as saying.
Operating under Alibaba International Digital Commerce (AIDC), the Singapore-based Lazada is part of a group that includes other e-commerce platforms such as Daraz and Trendyol, as well as the online store AliExpress.
These recent job cuts coincide with speculation about AIDC’s potential initial public offering in the United States in 2024, the report said.
“AIDC is going public, which means Lazada needs to turn a profit, and to achieve that, they are cutting costs,” the source explained.
Yesterday, Scoop reported that the beleaguered online shopping platform was purportedly gearing up for a significant workforce reduction in Malaysia, following a parallel downsizing in its Singapore branch.
Employees across various departments at Lazada Malaysia’s office have allegedly been informed about an impending meeting with the company’s human resources team in the next few days.
A source close to the matter told Scoop that the marketing team was anticipated to bear the brunt of the lay-offs, with potential reductions of up to 90%.
Scoop was also made to understand that the lay-offs would not be exclusive to Singapore and Malaysia, as firings are expected to take place in Vietnam, Thailand, Indonesia and the Philippines.
The source also mentioned that news of the lay-offs came just a week after Lazada opened a new floor in its office here to cater to an increased number of employees.
It is understood that while certain employees have received calendar invitations for their meeting with the human resources department, other staffers are left in the dark, as information on the matter is only being conveyed verbally without any written documentation.
Yesterday, The Edge Singapore reported that Lazada Singapore laid off its junior and senior employees from multiple departments yesterday.
It also said that the retrenchment exercise could last until tomorrow, with a source noting that meeting rooms had been reserved by the human resources department for the remainder of the week.
Last month, it was reported that China’s Alibaba Group Holding Ltd, Lazada’s parent company, had invested an additional US$634 million into Lazada as it raced to compete with other e-commerce platforms.
Alibaba is said to have repeatedly injected cash into Lazada since 2022, with the December investment marking its third investment for 2023, bringing the year’s total to over US$1.8 billion.
Founded in 2012 under parent company Rocket Internet, Lazada was then acquired by Alibaba in 2016. With a variety of similar platforms on the market, the company faces intense competition from the likes of Shopee in its Southeast Asian markets.
Lazada has also seen a number of chiefs assuming and then relinquishing the top post over the past five years.
In June last year, Alibaba Group Holding appointed James Dong as the new chief executive for the Lazada group.
The 42-year-old, who previously headed Alibaba’s business in Thailand and served as a business assistant to Alibaba CEO Daniel Zhang, replaced Chun Li – a seasoned technologist, who transitioned into a role as adviser to Lazada Group chairman Jiang Fan.
Following the appointment, Dong handed over the leadership in Vietnam to Kaya Qin.
Li, who helmed Lazada as group CEO for two years, succeeded Pierre Poignant, Lazada’s co-founder under Rocket Internet in 2012. – January 4, 2024