Pakistan-based Daraz Group, owned by Alibaba Group Holding, has announced plans to reduce its workforce by 11% to become the latest in the technology sector to lay off employees.
In a letter to its employees on Monday and shared on the company’s website, CEO Daraz Bjarke Mikkelsen blamed a difficult market environment, the Russia-Ukraine war, huge supply chain disruptions, soaring inflation, increasing taxes, and removal of essential government subsidies in its markets for the tough decision.
“In the last 12 months, the market environment turned and became extremely difficult,” Mikkelsen said in the memo.
The layoffs at Daraz came after a significant reduction of over 15,000 employees at its parent company, Alibaba, during the first nine months of 2022. Founded in 2015 and acquired by Chinese e-commerce giant Alibaba in 2018, Daraz Group is regarded as the top e-commerce platform in South Asia.
Serving the geographic market with a population of over 450 million that encompasses Nepal, Bangladesh, and Sri Lanka, Daraz has a workforce of 3,310 people, as stated on its website. This implies that the workforce reduction will impact approximately 360 employees.
According to the CEO’s memo, the acquisition by Alibaba had resulted in a five-fold increase in the user base of Daraz, from 3 million to over 15 million. The company saw an average order growth of nearly 100% until last year. However, the growth rate slowed down in 2022 due to the war in Europe and rising inflation which caused disruptions in supply chains and economies.
Pakistanis offer support and jobs
Pakistanis working in the tech industry offered to do their part in supporting their colleagues and helping them find new opportunities in these challenging times.
Sharjeel Ahmad, Manager of Recruitment and Talent Acquisition at Zones IT Solutions, asked those affected by the layoffs to connect with his team.
Another Pakistani on LinkedIn, Hammad Ashraf, said he is compiling a list of Daraz employees who were part of the layoffs and are now seeking new opportunities.
Layoffs at Multinational tech firms worldwide
With the decelerating economies and reduced consumer spending, the leading tech industry is currently facing a reckoning across the globe. The number of tech layoffs increased substantially last year, with a quarter of all layoffs in 2022 happening in the technology industry, a record high.
Listed below are the largest multinational tech companies that announced slashing their workforce in 2022:
- Facebook parent Meta Platforms
- Google parent Alphabet
- Zoom Video Communications
Major Chinese tech companies that have initiated layoffs include
- Tencent Holdings
- TikTok owner ByteDance
- Kuaishou Technology
- Didi Chuxing