Workers' union accepts Lazada's apology over layoffs; talks on better retrenchment benefits ongoing

SINGAPORE: Lazada has apologised to the union representing their workers for not consulting it prior to its latest retrenchment exercise.

In a joint statement on Saturday (Jan 6), the National Trades Union Congress (NTUC) and its affiliate Food Drinks and Allied Workers Union (FDAWU) said that the FDAWU has accepted Lazada’s apology.

"Both parties have agreed to work closely together and to put workers’ interests at the forefront of their negotiations.

"Lazada have also assured FDAWU that they will be consulted in advance for any future exercises," said the union.

Earlier on Friday, FDAWU had said that it was disappointed at not being notified or consulted prior to Lazada's retrenchment exercise.

The union wrote to Lazada stating that such a move is "unacceptable", and also escalated the matter to the Ministry of Manpower (MOM).

FDAWU also said that they were also in negotiations for additional retrenchment benefits for affected eligible workers.

Retrenched Lazada workers were told that they would receive two weeks' salary for every year of service.

"FDAWU do not find this satisfactory," the statement said, adding that MOM will continue to facilitate these negotiations.

"Lazada have assured FDAWU that they will fully cooperate and provide any necessary information to FDAWU to ensure that the retrenchment exercise was carried out fairly."

In a statement, Lazada Singapore said that it was "proactively" cooperating and consulting the Singapore government, NTUC, FDAWU and other relevant agencies.

Separately, a MOM spokesperson said that it "saw good progress" during discussions between Lazada and FDAWU on Friday.

"Lazada is working closely with MOM and the FDAWU to ensure that the restructuring exercise is held in a fair and responsible manner, including offering affected employees adequate support and appropriate retrenchment benefits in line with industry standards," said the Manpower Ministry.

MOM added that employers should act responsibly when considering cost-cutting measures, and that unionised companies like Lazada should initiate discussions with their unions to safeguard the interests of affected employees.

Lazada employees that CNA approached on Thursday estimated that close to a hundred people have been informed of their retrenchment, 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.

Employees told CNA that some people were left in tears by the news and were baffled by the sudden announcement.

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".

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.

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.

In December last year, Alibaba Group announced an additional US$634 million investment into Lazada.