Tuesday, February 27, 2024

Alibaba’s Lazada cuts staff across Southeast Asia in fresh round of layoffs

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Lazada is the third-largest e-commerce player in Indonesia, after Sea Limited’s Shopee and Tokopedia, according to Momentum Works.

Matt Hunt | Lightrocket | Getty Images

SINGAPORE — Alibaba-owned Lazada began its latest round of layoffs on Wednesday, a person with direct knowledge of the matter told CNBC, following a slew of media reports about cuts at the Southeast Asian e-commerce giant.

Employees across all Southeast Asia markets from all levels are affected, according to the person who declined to be named due to the sensitive nature of the subject. Those affected could be “in the hundreds,” with Singapore the most impacted, said the person.

Lazada’s Singapore spokesperson did not confirm that staff were being laid off, but told CNBC on Wednesday: “We are making proactive adjustments to transform our workforce, to better position ourselves for a more agile, streamlined way of working to meet 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 added.

Lazada operates across Southeast Asia countries namely Singapore, Indonesia, Malaysia, the Philippines, Thailand and Vietnam.

According to CNBC’s source, all functions including commercial, retail and marketing will be affected by the layoffs, which the person said are happening this week. Some employees have received meeting invites from the company but have yet to obtain any details, they said.

Lazada became a subsidiary of Alibaba Group after the Chinese tech giant acquired control of it in 2016. The company operates under Alibaba International Digital Commerce Group, which also includes AliExpress, Trendyol and Daraz.

Rising competition

The e-commerce company is facing stiff competition from rivals such as Sea Limited‘s Shopee and TikTok Shop in the region. TikTok is a short video app owned by Chinese tech giant ByteDance.

In December, Indonesia’s tech giant GoTo and TikTok announced a partnership where Tokopedia and TikTok Shop Indonesia’s businesses will be combined into an enlarged Tokopedia entity. GoTo is a merger between Indonesia’s ride-hailing giant Gojek and the country’s e-commerce platform Tokopedia.

As part of the deal, TikTok will take a controlling stake of 75.01% and invest $1.5 billion into the entity over time.

The deal came after Indonesia banned e-commerce on social media platforms in October to protect local merchants, forcing TikTok to halt its e-commerce service TikTok Shop.

Lazada’s leadership team has seen many changes in the past years.

In June 2022, Lazada Group CEO Chun Li was replaced by James Dong, who was chief executive of Lazada Thailand and Vietnam.

In 2020, Li took over the role from Pierre Poignant, who succeeded Lucy Peng in December 2018, just nine months after taking up the reins.

2023 was a tumultuous year for its parent company Alibaba, which scrapped plans to spin off its cloud business and went through a management shake-up.

— CNBC’s Naman Tandon and Lauren Choo contributed to this report.

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