NTUC and FDAWU express disappointment at Lazada layoffs without union consultation

SINGAPORE: NTUC and the Food, Drinks and Allied Workers Union (FDAWU) have jointly expressed disappointment regarding Lazada's recent retrenchment exercise, which was conducted without prior notification to the union.

In a statement released on Friday (5th January), NTUC highlighted the absence of communication with the union during this process.

Expressing their disapproval, FDAWU communicated with Lazada Singapore, deeming the action unacceptable, and has escalated the issue to the Manpower Ministry for further review.

NTUC reiterated its support for FDAWU and the affected workers, emphasizing the significance of collaborative efforts between companies and unions to ensure a fair and impartial process.

“We, too, are extremely disappointed in this move by Lazada. "

"NTUC would like to reiterate that it is critical for companies to work with their union to ensure that a fair and equitable process was carried out to safeguard the interests of all workers, especially our Singaporean core,” it added.

NTUC also appealed to employers to follow fair and responsible retrenchment practices if layoffs are unavoidable.

“Companies must exhaust all other options before making the call to retrench employees. It also appeals to companies to be considerate about the timing of such exercises and to avoid doing such exercises during festive periods, as far as possible.

“In the event of retrenchment, companies must ensure openness, transparency and consultation with unions and workers and observe the guiding principles outlined in NTUC’s Fair Retrenchment Framework [24 July 2020] and the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment,” said the congress.

NTUC highlighted that affected union members and employees can contact FDAWU at 6737 6088 during working hours or e-mail [email protected] and be linked to NTUC’s e2i (Employment and Employability Institute) for new employment opportunities.

Lazada initiates new year with layoffs across Southeast Asia

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 a 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.

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.

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.

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.