Daraz, Alibaba's e-commerce venture in South Asia, makes waves with layoff memo

Daraz declined to specify the percentage or total number of employees impacted in regions including Pakistan, Bangladesh, Nepal, Sri Lanka, and Myanmar
The image shows a person holding a box that says Daraz. — Daraz
The image shows a person holding a box that says Daraz. — Daraz

Daraz Group, an e-commerce platform owned by Alibaba, has revealed plans for layoffs across its operations to streamline and enhance agility, as stated by acting CEO James Dong in an internal memo obtained by Reuters on Tuesday.

Daraz declined to specify the percentage or total number of employees impacted in regions including Pakistan, Bangladesh, Nepal, Sri Lanka, and Myanmar.

"We regrettably bid farewell to numerous valued members of the Daraz family," the internal memo addressed to employees expressed.

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Last year, Daraz reported a workforce of 3,000 employees worldwide before undergoing an 11% reduction in response to challenging market conditions exacerbated by factors such as the Ukraine crisis, disruptions in the supply chain, steep inflation, increased taxes, and reduced government subsidies.

"Despite our exhaustive exploration of various solutions, our cost structure remains incompatible with our financial objectives. Confronting unprecedented market challenges, decisive action is necessary to ensure the long-term viability and sustained expansion of our company," Dong remarked.

He outlined the group's strategy to concentrate on enhancing the consumer experience by diversifying product offerings, expanding product categories, and optimising the operational efficiency of sellers on the platform.

In January, James Dong assumed the role of acting CEO, succeeding outgoing CEO Bjarke Mikkelsen.

Pakistan and Bangladesh represent Daraz's primary markets, as noted by former CEO Mikkelsen in the previous year.

Established in 2012 in Pakistan as an online fashion retailer, Daraz was acquired by the Chinese internet giant Alibaba in 2018.

The company's operations span four main domains: e-commerce, logistics, payment infrastructure, and financial services.

Daraz boasts a customer base exceeding 30 million, with over 200,000 active sellers and more than 100,000 brands, according to information provided to Reuters.