Lazada axes Singapore staff amid speculation of upcoming IPO

SINGAPORE - Regional e-commerce company Lazada on Jan 3 laid off an undisclosed number of its Singapore staff.

In response to queries from The Straits Times, a Lazada spokesman said: “We are making proactive adjustments to transform our workforce, to better position ourselves for a more agile, streamlined way of working to meet future business needs.”

The spokesman declined to disclose how many workers in Singapore or South-east Asia were affected and whether staff had received a severance package.

He said: “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.”

The Straits Times understands that a round of layoffs was also conducted in October 2023.

Founded in 2012, Lazada has a presence in six countries, including Indonesia, Malaysia, the Philippines, Thailand and Vietnam.

Lazada became a subsidiary of Alibaba Group Holding after the Chinese tech titan acquired a stake in it in 2016 to expand its presence in South-east Asia.

Following Alibaba’s split into six main business units in March 2023, reportedly to unlock shareholder value and jumpstart growth, the Singapore-headquartered firm now operates under Alibaba International Digital Commerce (AIDC), which also includes e-commerce platforms Daraz and Trendyol, as well as online store AliExpress.

The latest job cuts come amid speculation regarding AIDC’s potential initial public offering in the United States in 2024, first reported in May 2023.

The unit posted a 53 per cent increase in revenue from a year earlier for the quarter ended September 2023. It is considered to be a major competitor of fellow Singapore-based e-commerce platform Shopee.

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In December 2023, Alibaba pumped US$634 million (S$842 million) into Lazada, pushing its investment in the firm to more than US$1.8 billion in 2023. Alibaba has repeatedly injected Lazada with funds since 2022 amid growing competition within the e-commerce industry.

Commenting on the layoffs, Digital Industry Singapore (DISG) executive director Chan Ih-Ming said: “DISG is working closely with Lazada and relevant government agencies to assist affected employees in seeking alternative employment opportunities.

“While individual companies have to decide how to best position their business and workforce in the light of current economic conditions, Asia’s digital economy continues to expand and we are confident in the long-term growth potential of Singapore’s tech sector.”

DISG is a joint office of the Economic Development Board, Enterprise Singapore and Infocomm Media Development Authority. Its aim is to change the way the Government engages with the technology sector, by serving as a single interface for the industry. 

This article was first published in The Straits Times. Permission required for reproduction.