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E-commerce giant Daraz Announces Workforce Reduction to address ongoing financial pressures. “Despite significant cost-reduction efforts, our structure falls short of targets,” stated Acting CEO James Dong. He emphasized the workforce reduction as necessary for long-term stability and growth.
The company expresses deep gratitude to departing employees for their contributions to Daraz’s success. A comprehensive severance package, career support, and overall well-being assistance are provided.
Remaining employees are impacted by the workforce reduction, but are praised for their understanding and resilience. Daraz pledges to focus on:
- Enhanced Customer Experience: Expanding value-for-money products and diversifying categories.
- Boosted Seller Efficiency: Optimizing platform operations for sellers.
- Agility and Resilience: Cultivating a streamlined and adaptable organization.
- Market Leadership: Maintaining dominance across all five markets.
Dong reiterates Daraz’s commitment to South Asia’s digital transformation and e-commerce benefits for its businesses and consumers. He expresses confidence in the remaining team’s ability to “shape a future where the impact of digital commerce will be more remarkable.”
Industry experts point to workforce reduction as a common practice among e-commerce platforms. Temporary hiring during peak seasons, followed by reductions in the following months, is a recurring strategy. Daraz’s 11/11, 12/12, and New Year’s sales comprise their peak season.
This news follows a previous workforce reduction of 11% in 2023, attributed to challenging market conditions. The departing CEO, Bjarke Mikkelsen, cited factors like the Ukraine war, supply chain disruptions, inflation, and government subsidy removals as contributing factors.