Daraz Fires Several Employees Amid Tough Market Conditions

Due to the company’s cost structure continuing to fall short of its financial expectations, eCommerce behemoth Daraz has made the decision to fire “many valued members of the Daraz family.”

“This decision was taken as a last resort,” stated Acting CEO James Dong’s formal statement. We have worked hard over the last few years to control expenses and significantly increase operational efficiency. Our pricing structure still doesn’t meet our financial goals, even though we’re trying to look into other options. We have to move quickly to secure our company’s long-term viability and ongoing expansion in the face of unparalleled market obstacles.

“To all of you who are leaving, thank you for your commitment and knowledge in helping to build Daraz into what it is now. You are the reason Daraz was able to succeed. Digitalization has allowed us to collectively have a lasting effect on hundreds of thousands of sellers and millions of consumers. Via a severance plan, career assistance, and general wellbeing, we will make every effort to support you.

We sincerely appreciate your patience and fortitude for those that choose to continue their journey at Daraz. We are confident that by working together, we can support Daraz as it navigates this difficult time.

According to Dong, Daraz is currently aggressively enhancing the customer experience by broadening its product categories and diversifying the value-for-money products it offers. We will cooperate to improve the sellers on our platform’s operating effectiveness. In order to preserve our market leadership in all five areas, we will also work to build an effective, adaptable, and resilient organization that is infused with a winning mentality and the capacity to triumph.

“We are devoted to sustaining our regional footprint in order to continue contributing to South Asia’s digital development. We are still passionate and ambitious about the region. “Our main objective is to make e-commerce beneficial for companies and customers in South Asia,” he went on to say.

The team’s potential to continue uplifting communities through the transformative force of commerce is something that the acting CEO expressed confidence in. He said, “With our combined strength and dedication, we stand ready to shape a future where the impact of digital commerce will be more remarkable.”

According to experts, employing excessively during high sale seasons—especially the fourth quarter of the year—is a widespread trend shared by all major e-commerce platforms. When the first quarter of each year’s demand wanes, these extra workers are then let go. For Daraz, the peak season is made up of its sales on 11/11 and 12/12, as well as the New Year’s sale.

It is noteworthy to add that Daraz laid off 11% of its employees last year, citing challenging circumstances.

The company’s CEO at the time, Bjarke Mikkelsen, attempted to justify the firing spree by claiming that factors like the conflict between Russia and Ukraine, disruptions in the supply chain, skyrocketing inflation, rising taxes, and the elimination of crucial government subsidies in markets like Pakistan had made the market environment extremely difficult.

Leave a Comment