According to a news report by The Edge Singapore, junior and senior employees across various departments at Lazada were laid off.
At the end of the previous workday on January 2, employees reportedly received last minute calendar invites for individual meetings with the HR department for January 3.
Three retrenched employees shared with CNA that almost about 100 staff in Singapore, including the logistics team, have been affected. Some departments have also experienced a large axing of their headcount from 20 to 30 people to four to five employees.
This round of layoffs came out of nowhere for those who have been retrenched, with some citing the company’s lack of transparency causing large amounts of anxiety and uncertainty among current employees.
News reports state that the layoffs are currently ongoing, with meeting rooms fully booked until the end of this week. While retrenched employees were given severance packages, some employees have come forward disapproving the company’s lack of support and counselling following the sudden news.
According to media reports, the layoff exercise is expected to end by today (January 5). Lazada has yet to release an official media statement.
Digital Industry Singapore, a government office which supports the growth of the technology sector here, said it is working closely with Lazada and other government agencies to assist affected employees with alternative employment opportunities.
The tech industry has seen a series of layoffs across different tech unicorns in the past two years. Notable cases include Grab, where 1,000 jobs were cut; and e-commerce giant Shopee also conducted its third round of layoffs at the end of 2022.
Not all hope is lost
Speaking to the The Straits Times, Maybank economist Chua Hak Bin expresses his optimism on Singapore’s economy, citing that 2023 ended on a high note, driven by a stronger than expected manufacturing recovery. He has also estimated that 2024 growth will come in at 2.2 per cent, on the higher side of MTI’s 1 per cent to 3 per cent forecast range.
On the other hand, Singapore’s Prime Minister Lee Hsien Loong expressed the importance of remaining judicious. In his annual New Year Message in December 31 last year, he acknowledged that Singapore’s economy grew 1.2 per cent in 2023, and is expected to grow by 1 to 3 per cent in 2024.
“But much will depend on the external environment”, said Prime Minister Lee Hsien Loong. This is in light of the Russia-Ukraine conflict and the ongoing war between Israel and Palestine. He added that the geopolitical uncertainties will inevitably weigh down on the global economy and Singapore’s economical growth.
Cost cutting measures in preparation for IPO?
In response to media queries on the layoffs, a Lazada spokesperson cites that the company is making “proactive adjustments” to streamline their business operations for future business needs.
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.
Lazada spokesperson in a report by CNA
Lazada and it’s parent company Alibaba has experienced a series of major changes in leadership in recent years. Most recently, former Alibaba CEO Daniel Zhang announced his departure from the company in June 2023 after his 16-year tenure.
Back in 2023, Alibaba streamlined its operation and restructured Lazada under its new Global Digital Commerce Group, paving way to a possible IPO.
The layoff exercise may be part of the group’s plan to solidify the finances of the new business unit in preparation of the potential IPO.
The firm is in the early stages of consideration and the IPO’s size has yet to be determined, according to people familiar with the matter. The business group is in talks with banks that could potentially help prepare for the IPO next year, said one of the people.
Valuations for the international business units vary: Morgan Stanley in March priced “international retail” units including Lazada and Trendyol at roughly US$29 billion (S$38.5 billion), while an analyst report by China International Capital Corp in the same month valued the firm’s international division at about US$39 billion.
Straits Times, May 5, 2023
Feature Image Credit: LazBeat
