Sudden layoffs at Lazada left people crying, baffled, say employees

SINGAPORE: As Lazada workers filed back to the office in the new year, they could sense something was amiss as all the meeting rooms were booked up, with back-to-back slots.

Some got meeting invitations the night before, or just a few hours before the dreaded session at which they were informed that they had lost their job. Some people had to cancel their leave to come back for the sudden meeting.

A number of people cried, especially on Wednesday (Jan 3), as it was completely unexpected, employees told CNA.

This was how three Lazada employees, who spoke to CNA on condition of anonymity, described the retrenchment process, which began from Wednesday morning at the e-commerce giant's regional headquarters in Singapore.

They described it as "unfair", "opaque" and "baffling", adding that it has caused much anxiety and speculation among their colleagues due to the lack of transparency.

CNA understands that the layoffs are ongoing. Most of the Lazada employees CNA approached declined to comment, saying that they did not know much.

The three who agreed to be interviewed estimated that close to a hundred people have been informed of their retrenchment so far, among the co-workers they have worked or interacted with. Those affected were from departments all across the company.

Some departments have had most of their manpower cut, they said, with one being shaved from about 20 to 30 people to four or five remaining employees.

CNA has sent repeated queries to Lazada Singapore about the retrenchment, news of which was first reported by The Edge on Wednesday. 

COMPANY IS MAKING "PROACTIVE ADJUSTMENTS"

A company spokesperson said on Wednesday evening that the company is "making proactive adjustments to transform our workforce, to better position ourselves for a more agile, streamlined way of working to meet future business needs".

"For the past few years, Lazada has continually evolved to ensure we maintain a sustainable business growth model," the spokesperson added.

"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."

Questions about the extent of the layoffs and the reason for this round of retrenchment remain unanswered. An employee estimated the company has about 8,000 to 10,000 members of staff in Singapore, including the logistics team.

CNA understands that Lazada Singapore had retrenched some workers last year, but it was usually just a few people or a particular department that was affected. This time, staff from all parts of the company – and at all levels – have been affected. 

It was "baffling" because the three employees said they saw people who were star performers and even those who had just been promoted axed, and it was impossible to know who would be next.

They also said that the severance package was lower than expected, and worse than what other tech companies such as Shopee and Grab had offered to their employees who were laid off last year.

One interviewee said this is the largest layoff exercise she has experienced, and it was "demoralising". All said they found it impossible to work as many of the people they had been collaborating with had been laid off.

A key factor has been the lack of communication and transparency from the management, the interviewees said. They also said the process was impersonal, and could be more "humane".

"We all have mortgages to pay, families to care for," said one employee.

Another employee said she was told in a 20-minute meeting that she had been laid off. She was given a severance package and asked to sign an agreement. The company did not offer to buy back their stock options, nor did it offer any counselling or other support, she said. 

ASSISTANCE BEING PROVIDED 

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

Founded in 2012 by Rocket Internet, Lazada was acquired by the Alibaba Group in 2016. Lazada Singapore is the regional headquarters of Alibaba's e-commerce ventures in Southeast Asia.

It has a presence in six countries in the region – Indonesia, Malaysia, the Philippines, Thailand and Vietnam – and the employees said they have heard of layoffs from colleagues in other countries.

They postulated several reasons for the current layoffs, but said it was impossible to know for sure as they have not been told of the larger picture.

Last March, Alibaba announced significant restructuring and split into six business groups. Lazada now comes under Alibaba International Digital Commerce alongside other e-commerce platforms AliExpress, Trendyol and Daraz.

And on Dec 14 last year, Alibaba Group announced an additional US$634 million investment into Lazada.

It is facing intense competition in Southeast Asia’s e-commerce space from SEA’s Shopee and TikTok, which has rolled out e-commerce operations in several markets. TikTok, owned by ByteDance, recently invested US$1.5 billion in Tokopedia, the biggest e-commerce platform in Indonesia.

As of March last year, Alibaba Group employed 235,000 people.