Tech layoffs hit Lazada, with 100 people retrenched in S’pore sparking fear and uncertainty

Imagine coming back from the holidays, feeling rejuvenated and determined to get your hamster wheels going once again. But a night before you get back to work, you receive an e-mail or a message to attend a sudden meeting with your Human Resources (HR) department the next day.

To your shock, you found out that you will no longer be working in your current company and were told to clean up your desk by the end of that day.

Unfortunately, this has became a reality for multiple employees at e-commerce giant Lazada, as they have conducted a mass retrenchment exercise since Wednesday (January 3).

Employees riddled in shock and anxiety

Image Credit: Tripartite Alliance Limited

According to a news report by The Edge Singapore, junior and senior employees across various departments were affected by the layoff exercise, including commercial and marketing teams. Employees reportedly received last minute calendar invites for individual meetings with the HR department for January 3 at the end of the workday on Tuesday (January 2).

In a follow-up report by CNA, three retrenched employees shared that almost about 100 staff in Singapore, including the logistics team, have been affected. Some departments have also exprienced a large axing of their headcount from 20 to 30 people to four to five employees.

This round of layoffs came out of nowhere for those who have been retrenched, with some citing the company’s lack of transparency causing large amounts of anxiety and uncertainty among current employees.

News reports state that the layoffs are currently ongoing, with meeting rooms fully booked until the end of this week. While retrenched employees were given severance packages, but some employees have come forward claiming the company’s lack of support and counselling following the sudden news.

Digital Industry Singapore, a government office which supports the growth of the technology sector here, said it is working closely with Lazada and other government agencies to assist affected employees with alternative employment opportunities.

Reinventing themselves from the inside out

A Lazada spokesperson has since responded to media queries, citing that the company is making “proactive adjustments” to streamline their business operations for 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.

Lazada spokesperson in a report by CNA

Lazada and it’s parent company Alibaba Group Holding has experienced a series of major changes in leadership in recent years. Most recently, former Alibaba CEO Daniel Zhang announced his departure from the company in June 2023 after his 16-year tenure. The Chinese commerce giant has also made a series of investments into Lazada, pumping a total of over US$1.8 billion into the platform in 2023.

Economic conditions result in mix sentiments from analysts and politicians

Grab and Shopee were some of the brands that conducted layoffs in the past two years/ Image Credit: Grab, Shopee Singapore

The tech industry has seen a series of layoffs across different tech unicorns in the past two years. Notable cases include Grab, where 1,000 jobs were cut; e-commerce giant Shopee also conducted its third round of layoffs at the end of 2022.

Speaking to the The Straits Times, Maybank economist Chua Hak Bin expresses his optimism on Singapore’s economy, citing that 2023 ended on a high note, driven by a stronger than expected manufacturing recovery. He has also estimated that 2024 growth will come in at 2.2 per cent, on the higher side of MTI’s 1 per cent to 3 per cent forecast range.

On the other hand, Singapore’s Prime Minister Lee Hsien Loong expressed the importance of remaining judicious. In his annual New Year Message in December 31 last year, he acknowledged that Singapore’s economy grew 1.2 per cent in 2023, and is expected to grow by 1 to 3 per cent in 2024.

“But much will depend on the external environment”, said Prime Minister Lee Hsien Loong. This is in light of the Russia-Ukraine conflict and the ongoing war between Israel and Palestine. He added that the geopolitical uncertainties will inevitably weigh down on the global economy and Singapore’s economical growth.

Relating to the tech landscape in Singapore, the continuous changes in the economy has directly impacted the growth of the tech unicorns in Singapore, causing large amounts of anxiety and insecurity amongst employees. Tech firms will need to be able to effectively manage their resources, while employees will need to continually upskill themselves and adapt quickly to changes in the job market.

Feature Image Credit: LazBeat