Daraz releases a memo announcing layoffs.
In an internal memo reviewed by Reuters, acting Chief Executive Officer James Dong announced layoffs across the Alibaba-owned e-commerce platform Daraz Group. The move aims to “adopt a more streamlined and agile structure,” reflecting the company’s strategic realignment efforts.
Impact on Employees
Although the memo did not specify the exact number of individuals affected, Daraz declined to disclose the percentage or absolute figure of impacted employees across its operations spanning Pakistan, Bangladesh, Nepal, Sri Lanka, and Myanmar. The memo expressed regret at bidding farewell to numerous valued members of the Daraz family.
Challenges and Market Dynamics
Daraz faced significant hurdles in the preceding year, including adverse market conditions, supply chain disruptions, geopolitical tensions such as the Ukraine crisis, and economic factors such as soaring inflation and higher taxes. These challenges prompted the e-commerce marketplace to reduce its workforce by 11%, despite employing 3,000 individuals across various geographies.
Strategic Response and Future Plans
James Dong emphasized the imperative of aligning the cost structure with financial targets amidst unprecedented market challenges. The group aims to enhance long-term sustainability and foster continued growth by focusing on improving the consumer experience. Plans include diversifying offerings, expanding product categories, and enhancing operational efficiency for sellers on the platform.
Leadership Transition and Market Focus
The appointment of James Dong as acting CEO in January marked a transition in leadership, succeeding outgoing CEO Bjarke Mikkelsen. With Pakistan and Bangladesh identified as Daraz’s largest markets, the company remains committed to serving these regions while strategically navigating operational changes.
About Daraz Group
Established in 2012 as an online fashion retailer in Pakistan, Daraz underwent significant growth and transformation following its acquisition by Chinese internet giant Alibaba in 2018. The company operates across multiple sectors, including e-commerce, logistics, payment infrastructure, and financial services, catering to a vast consumer base of over 30 million shoppers, supported by 200,000 active sellers and representing more than 100,000 brands.
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