Daraz has downsized its workforce and the CEO of the company resigned. Following the implementation of a downsizing initiative by Daraz, the largest e-commerce company in Pakistan, CEO Bjarke Mikkelsen is parting ways with the organization after eight years of committed service, as reported recently.
Daraz is said to be in the midst of cost-cutting measures, which include a workforce reduction of at least 25%, affecting personnel across various levels of management. Today, Bjarke officially declared his exit from Daraz, citing a commitment to prioritize his family and invest more time in his personal life.
Taking over the position of acting CEO at Daraz will be James Dong, the current CEO of Lazada Group, another subsidiary of Alibaba. Bjarke conveyed his well-wishes for the ongoing success of the company in the fiercely competitive e-commerce arena and underscored the significance of fostering a closer integration between Daraz and its sister companies.
Daraz Enacts Workforce Reduction as Part of Cost-Cutting Measures
Acting CEO James Dong is tasked with enhancing collaboration between Daraz and affiliated companies such as Lazada, Trendyol, AliExpress, and Alibaba.com. This initiative is viewed by the company as a key component of its overarching strategy to navigate the complexities of the evolving e-commerce market.
As per Profit’s sources within Daraz, indications point to Bjarke functioning as a symbolic leader within the company, executing decisions originating from Alibaba. With a banking background, Bjarke significantly contributed to the expansion and prominence of Daraz in the e-commerce markets of Pakistan, Bangladesh, Myanmar, Nepal, and Sri Lanka.
In the midst of organizational shifts, there are rumors circulating about the potential takeover of Daraz by Trendyol, the Turkish e-commerce company that is roughly 86% owned by Alibaba. This prospective acquisition is consistent with Alibaba’s strategic maneuvers within its portfolio of entities.
The workforce downsizing choice aligns with Daraz’s initiative to curtail expenses, reflecting cost-cutting practices seen across various Alibaba entities. In the previous year, the ex-CEO of the company unveiled a worldwide reduction in the workforce by 11%, attributing it to factors such as geopolitical conflicts, supply chain disruptions, inflation, taxes, and subsidy eliminations.
This restructuring was geared toward improving profitability, streamlining the organization, and enhancing overall efficiency. As reported, the company experienced group-level losses amounting to $143 million in 2022, marking a notable rise from the $113 million recorded in the preceding year. This underscores the imperative for strategic adaptations in light of evolving market dynamics.