Alibaba's Lazada, a prominent Southeast Asian e-commerce platform, has initiated a new round of layoffs, affecting employees across all levels in various Southeast Asian markets, according to a report by CNBC, citing an unnamed person with direct knowledge of the matter.
(FILES) The logo of Alibaba is seen at the World Artificial Intelligence Conference (WAIC) in Shanghai on July 6, 2023. Shares in Chinese e-commerce giant Alibaba plummeted on November 16, 2023, after the company said it would cancel the spinoff of its cloud computing arm because of US curbs on exports of advanced chips. Alibaba shares were down eight percent in late morning trade on Wall Street. The company had planned to split the group into six distinct entities, with the intention of taking them public.
Lazada's Workforce Adjustments
The layoffs are reportedly impacting hundreds of employees, with Singapore experiencing the most significant impact. While Lazada's spokesperson in Singapore did not explicitly confirm the layoffs, they acknowledged adjustments in the workforce to transform and streamline 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," the company said in a statement with CNBC.
The e-commerce platform's ongoing transformation is characterized as a strategic initiative aimed at establishing a more nimble and efficient work environment. The company underscores the importance of reevaluating workforce needs and operational frameworks to position Lazada for long-term success and adaptability.
Operating across Southeast Asian countries, including Singapore, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam, Lazada encompasses a diverse range of functions, spanning commercial, retail, and marketing. The reported layoffs are anticipated to impact all these functions and are scheduled to take place throughout the week.
Since becoming a subsidiary of Alibaba Group in 2016, Lazada has operated within the Alibaba International Digital Commerce Group, alongside entities like AliExpress, Trendyol, and Daraz.
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Strong Competition in Southeast Asia
The e-commerce giant contends with robust competition in the Southeast Asian market, notably from rivals such as Shopee, owned by Sea Limited, and TikTok Shop, a short video app under the ownership of ByteDance,.
The competitive dynamics in the market escalated with the strategic alliance revealed in December between Indonesia's tech powerhouse GoTo and TikTok.
This collaboration entails the combination of Tokopedia and TikTok Shop Indonesia's operations into an expanded Tokopedia entity. As a significant aspect of this agreement, TikTok is set to secure a controlling stake of 75.01% and commit a gradual investment of $1.5 billion.
This development is a direct response to Indonesia's October decision to prohibit e-commerce on social media platforms, a regulatory move aimed at safeguarding local merchants.
Consequently, TikTok was compelled to suspend its e-commerce service, TikTok Shop, aligning with the regulatory alterations to ensure compliance.
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