Alibaba-backed Daraz lays off staff in bid for long-term growth

Photo credit: Daraz

Daraz Group, a Pakistan-based ecommerce platform owned by Alibaba, has decided to significantly reduce its staff size in all markets, Reuters reported, citing an internal memo from acting CEO James Dong.

The memo did not reveal the exact number of affected employees, but sources told Profit, a local Pakistani publication, that it could be around a quarter of the company’s global workforce. This could be around 250 to 400 people in Pakistan, Daraz’s biggest market, and up to 800 workers across the whole Daraz Group.

Besides Pakistan, Daraz is present in Bangladesh, Nepal, and Sri Lanka. It has also operated in Myanmar, though the market – which is in the middle of a prolonged civil war – is no longer listed on the Daraz website.

In the memo, Dong – who is concurrently serving as Lazada’s group CEO – said that Daraz’s “cost structure continues to fall short of our financial targets.” The company had to act quickly to secure its long-term sustainability and growth, he added.

The move comes roughly a month after the exit of Bjarke Mikkelsen, Daraz’s founder and long-serving CEO. At the time, Mikkelsen said that Dong would work on better integrating Daraz with its sister platforms via Alibaba. These include Lazada, Trendyol, and AliExpress.

Launched by Rocket Internet, Daraz started in 2012 in Pakistan as an online fashion retailer. It was acquired by Alibaba in 2018.

Around this time last year, the company had slashed 11% of its workforce amid difficult market conditions. The move affected around 300 workers.

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