Daraz to shed jobs
Daraz Bangladesh, a top e-commerce platform, has announced it will let go of a significant number of employees as part of its parent company Daraz Group’s plan to cut 11% of its workforce to adjust to the current market conditions.
The number of employees at Daraz Bangladesh has surged from 200 in 2018 to 5,000 by the end of 2022, with 1,000 of them being full-timers. Unfortunately, 50 full-time employees have received termination letters according to a senior official who spoke anonymously to The Daily Star.
The CEO of Daraz Bangladesh, Bjarke Mikkelsen, cited the difficult market environment, including a war in Europe and supply chain disruptions, as the reason for the company’s need to cut costs. The company has already shut down its business-to-business e-commerce wing and laid off 80% of the workforce, and more layoffs are expected in other departments such as marketing. The total number of layoffs has not been disclosed by Daraz Bangladesh, and officials declined to comment on the matter.
In July, HungryNaki, the food delivery division of Daraz, underwent significant changes as they reduced their operations by half and laid off a large portion of their employees. This change came just over a year after Alibaba fully acquired HungryNaki through the Daraz Group.
Alibaba’s acquisition of Daraz, a Pakistan-based e-commerce platform, took place in 2018.
Due to the global economic slowdown and declining consumer confidence caused by rising inflation, many online platforms including Foodpanda and Sheba also faced job cuts and halted expansion plans.
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The e-commerce sector in Bangladesh faced additional challenges in 2021 when fraudulent activities were exposed, causing uncertainty for the recovery of millions of taka.
Despite these challenges, Alibaba has expressed its commitment to the Bangladesh market by announcing plans to invest Tk 1,000 crore in the next 3-4 years to expand their operations and build infrastructure. However, with the current market downturn, it remains to be seen how long Alibaba can maintain their optimism in this market.
Daraz Bangladesh has made significant progress, increasing the number of product collection points from 48 in 2019 to 235, and growing its delivery services from 150 two-wheelers and 25 vans to 2,300 two-wheelers and 600 vans. They have also introduced nine new Digibox points in partnership with a2i to provide automated collection services.
