Lazada initiates new year with layoffs across Southeast Asia despite securing US$1.8B funding in 2023

SINGAPORE: Lazada, one of Southeast Asia’s largest e-commerce entities, initiated the new year by implementing undisclosed layoffs that impacted its workforce across six countries.

This move comes despite the company successfully securing total of US$1.8 billion in funding throughout 2023.

Numerous reports indicate that employees at all levels across Southeast Asia have been affected by the layoffs.

The Alibaba-owned e-commerce giant reportedly plans to reduce its staff by 30% throughout Southeast Asia.

In Singapore, as per reports from state media CNA, approximately 100 individuals have already lost their jobs due to these layoffs.

Some employees were compelled to cut short their leave for an abrupt meeting, only to discover that they were being terminated.

According to employees who spoke to CNA, the process was described as “unfair,” “opaque,” and “baffling,” leading to heightened anxiety and speculation among colleagues due to a lack of transparency.

Responding to queries, Lazada Singapore informed CNA on Wednesday evening that the company is proactively restructuring its workforce to achieve greater agility and efficiency to meet future business demands.

“For the past few years, Lazada has continually evolved to ensure we maintain a sustainable business growth model,” the spokesperson added.

“This transformation necessitates that we reassess our workforce requirements and operational structure to ensure Lazada is better positioned to future-proof our business and people.”

However, Lazada declined to disclose the exact number of affected workers in Singapore or Southeast Asia, as well as whether employees received any severance packages.

Retrenchment in Indonesia office

Separately, according to JakartaGlobe, an impacted employee in Indonesia disclosed that the layoffs targeted nearly all C-level executives across Singapore, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.

The employee revealed that departments such as human resources, marketing, and commercial operations will now operate under the guidance of the company’s regional executives.

The exact number of affected employees remains ambiguous.

The source added, “Certain departments faced a 50 per cent reduction in staff, while others saw a complete termination of their workforce.”

Malaysia employee not spared from major Lazada layoffs

Recent reports from Malaysia suggest that Lazada employees in the country are not exempt from the widespread layoffs.

Allegedly, employees across various departments within Lazada Malaysia’s office have received notifications about an imminent meeting scheduled with the company’s human resources team in the coming days.

As per online media Scoop, it’s believed that the marketing team in Malaysia could face a significant impact, potentially experiencing reductions of up to 90%.

Expressing uncertainty about the situation, a source who spoke anonymously to Scoop stated, “We’re not entirely sure what’s happening, but we’ve been informed about the impending layoffs. ”

“The lack of transparency has led to a complete information blackout.”

Speculation of AIDC’s United States IPO

Established in 2012 under the Rocket Internet umbrella, Lazada has established its presence across six countries across Southeast Asia.

In 2016, Lazada became a subsidiary of Alibaba Group Holding following the acquisition of a stake by the Chinese tech giant, aiming to expand its reach in the region.

Post-Alibaba’s restructuring into six primary business units in March 2023, the Singapore-based company now operates within Alibaba International Digital Commerce (AIDC).

This division includes e-commerce platforms such as Daraz and Trendyol, alongside the online retail platform AliExpress.

The recent job cuts coincide with discussions surrounding the potential initial public offering (IPO) of AIDC in the United States, initially reported in May 2023.

Alibaba significantly reinforced Lazada’s financial standing in December 2023 by injecting US$634 million (S$842 million), thereby escalating its total investment in the firm to over US$1.8 billion for the year 2023.

Since 2022, Alibaba has consistently infused Lazada with substantial funds due to intensifying competition within the e-commerce sector.