Zilingo’s layoffs expose internal fault lines

As the alcohol started flowing at Zilingo’s year-end party, employees witnessed the co-founders file out of the warehouse and head to the clubs – along with a select group.

While insignificant on its own, the incident fed into the disgruntlement that some staff were feeling toward the Singapore-headquartered firm. Their grouse? Systemic favoritism.

“It’s blatant,” says a staff member who declined to be named. Favored team members receive promotions or opportunities to work on more important projects regardless of merit, he claims, adding that “the unwanted work will be left over for the rest.”

The Zilingo team / Photo credit: Zilingo

Everything came to a head last week. The young firm, which has gone from zero to almost a billion US dollars in value within half a decade, made headlines after it laid off 5% of its staff or about 45 of its 900-strong global headcount.

Sources, however, said the number of affected employees is higher. Those affected include people in Europe, Indonesia, as well as the company’s just-shuttered US and Australia offices.

The news in itself isn’t surprising. As investors tighten their purse strings amid Covid-19, many internet startups are shedding staff just to survive. Zilingo’s layoffs, however, stood out: Affected workers have lamented to the media about how the exercise had been mismanaged and how the majority of those affected in the Singapore headquarters were locals.

This was one of the toughest decisions we’ve had to take.

Other issues are at play as well. While Zilingo has impressed topflight investors like Sequoia Capital and Temasek with its blistering growth figures, employees raised questions about whether the numbers could be maintained.

In response to Tech in Asia’s detailed list of questions, the company issued a statement: “Last week, we executed an organizational restructuring to focus on our core business in Asia. This meant that we had some redundancies and had to let some of our beloved colleagues go.

This was one of the toughest decisions we’ve had to take as a leadership team. We are very sorry to see some of our most hardworking people leave us.”

We reached out to four of Zilingo’s investors, and none of them were able to comment.

Sinking morale

For three of the employees that Tech in Asia spoke to, the way the layoffs were done fueled their misgivings. They question why certain colleagues were kept while others were let go and allege that the startup didn’t provide post-retrenchment support.

“Understandably, some of our colleagues are very upset and even angry with us. Each of the affected employees is being spoken to one on one to answer their questions and concerns,” Zilingo’s statement read.

Can it sustain its growth?