Alibaba Group's Dalaz Group will lay off some employees, CEO James Dong announced in a statement on Wednesday.
The South Asian e-commerce giant, founded in 2012, did not say how many employees or what percentage of its workforce it would let go as it pursues a “more streamlined and agile structure.” .
Dong said in the memo that the decision comes as Alibaba seeks to ensure the continued viability of the company, which it acquired in 2018.
“This decision was taken as a last resort. Over the past few years, we have worked to significantly improve cost control and operational efficiency. Despite our efforts to explore various solutions, our Our cost structure remains below our financial targets,” Dong wrote. “We are facing unprecedented challenges in the market and must act quickly to ensure our long-term sustainability and continued growth.”
The acting CEO only joined the company in late January after it was announced that the company's founder and former CEO Bjarke Mikkelsen was leaving the company “for personal reasons.” Mr. Dong previously served as CEO of Lazada Group, a sister company of Daraz.
Dong's sentiments about “long-term sustainability” echo Mikkelsen's aspirations, which he reiterated when he left office.
“My north star has always been to build Daraz into a business strong enough to survive in the marketplace long-term,” he said in a statement in January.
This round of job cuts comes after Mikkelsen announced last year that the company would cut 11 percent of its workforce across all regions.
The former CEO cited “a war in Europe, massive supply chain disruptions, soaring inflation, higher taxes, and the removal of essential government subsidies.” [Daraz’s] 'market' was the main reason for the company's decision to reduce its workforce in February 2023.
At the time, Reuters reported that prior to the job cuts, Daraz employed about 3,000 people across South Asia.
Headquartered in Singapore, the company has offices in Karachi, Pakistan. Colombo, Sri Lanka; Yangon, Myanmar. Kathmandu, Nepal and Dhaka, Bangladesh. The company's announcement did not indicate whether certain regions would be more affected than others this time.
Although it remains to be seen which employees will be eliminated from their positions, Dong said the company will remain bullish on market growth across South Asia.
It had approximately 15 million active shoppers at the beginning of 2023, the company said in a statement. According to Reuters, the company has confirmed that there are currently more than 30 million shoppers, 200,000 active sellers and more than 100,000 brands on the market.
To attract that audience, the company will strive to diversify its offerings, expand product categories and enhance seller efficiency, Dong said in the note.
“We remain passionate and ambitious about South Asia and are committed to maintaining our presence in the region 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 respond to Sourcing Journal's request for comment.
