Daraz slashes workforce amidst 'challenging market conditions'

Published On: March 10, 2024 11:03 AM NPT By: Republica | @RepublicaNepal

KATHMANDU, March 10: Daraz, an e-commerce platform, owned by the Chinese e-commerce giant Alibaba operating across several South Asian countries along with Nepal, has announced a new round of lay-offs.

In an internal report, the company stated that the restructuring aims to create a more streamlined and agile organizational structure. Last Tuesday, the company's CEO, James Dong, addressed the layoffs in a memo circulated internally.

“Reluctantly, we will bid farewell to many valued members of the Daraz family,” Acting Chief Executive James Dong said in an internal memo published on the company’s website on Tuesday.

“Despite our efforts to explore different solutions, our cost structure continues to fall short of our financial targets,” he said. “Facing unprecedented challenges in the market, we must take swift action to ensure our company’s long-term sustainability and continued growth,” he added.

The report did not specify the exact number of employees affected, but sources indicate that hundreds have been laid off. Daraz has yet to comment on the impact of these layoffs on its operations in Nepal, Pakistan, Bangladesh, Sri Lanka, and Myanmar.

According to Reuters, Daraz announced last year that it would reduce its workforce by 11 percent due to a variety of factors including market conditions, the Ukraine crisis, supply chain disruptions, inflation, higher taxes, and reduced government subsidies. At that time, Daraz employed approximately 3,000 staff across the region. The company cited challenging market conditions, escalating costs, distribution hurdles, increased taxes, and reduced government support as reasons for the layoffs.

However, the exact number of employees affected in the current round of layoffs has not been disclosed by Daraz.

Established as an online fashion retail platform in Pakistan in 2012, Daraz was later acquired by Alibaba in 2018. Since then, Daraz has expanded its operations to Nepal, emerging as a trailblazer in the country’s e-commerce sector. Presently, Daraz boasts over 30 million products, with more than 200,000 active sellers and over 100,000 brands onboard.