Lazada layoffs: agreement reached for ‘enhanced support package’

SINGAPORE: Employees retrenched by regional e-commerce player Lazada, a brand owned by Alibaba, can anticipate an “enhanced support package” following several weeks of negotiations between their former employer and the workers’ union.

NTUC secretary-general Ng Chee Meng announced on Facebook (4 February) that the agreement follows discussions between Lazada, the National Trades Union Congress (NTUC), and the Food, Drinks, and Allied Workers Union (FDAWU), where “an amicable settlement” has been reached.

According to the joint statement, the support package will aim to assist eligible affected union members.

In his post, he recognised FDAWU’s intervention as “a strong testament to how our unions can represent and protect their members’ interests.”

“To our workers, know that you are not alone. NTUC Singapore and our affiliated unions stand ready to walk alongside you. We encourage you to do your part and join us. We will be there to support you,” the post read.

Lazada has also committed to establishing a specialized training fund for FDAWU, which will be utilized to provide employment and employability support to those impacted. This initiative will be conducted in partnership with NTUC’s Employment and Employability Institute (e2i).

While the exact financial details of the package remain undisclosed due to a confidentiality clause, an NTUC spokesperson emphasized that eligible union members can expect enhanced benefits, including both financial assistance and training support.

To access these benefits, members must register with FDAWU and furnish necessary documentation, after which the union will determine the final payout to affected individuals.

According to the Ministry of Manpower’s (MOM) website, the “prevailing norm” is to pay a retrenchment benefit of between two weeks to one month’s salary per year of service.

Additionally, former employees of Lazada Singapore who were retrenched from 3 January to 5 January and are also FDAWU members are “encouraged” to email the union at [email protected] by 5 p.m. on 20 February for further instructions.

MOM, which facilitated discussions between the union and Lazada, expressed satisfaction that despite Lazada’s “not starting off in the right manner with the union”, all parties have resolved the issue and are now committed to working together to achieve win-win outcomes for the business and workers.

They emphasized the importance of all employers acting responsibly when considering cost-cutting measures and stressed that retrenchment should be their last resort.

In January, Lazada let go of an undisclosed number of its Singapore workforce without informing the union, despite these workers being unionised.

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.

At the time, Lazada stated that the action was part of a business transformation initiative aimed at ‘better positioning the company for a more agile, streamlined way of working to meet future business needs.’