Daraz is an online marketplace and e-commerce platform based in South Asia, serving customers in Pakistan, Bangladesh, Sri Lanka, Myanmar, and Nepal. It offers a wide range of products including fashion, electronics, home appliances, health and beauty products, and much more. Customers can purchase products through the platform and have them delivered to their doorstep.
It is an e-commerce giant in Pakistan, with no other business coming close to its standard. However, even giants like Daraz cannot stay safe from the current market conditions in Pakistan. The company has announced they are going to reduce its workforce by 11 percent because of the difficult market conditions.
Here is what we know about this sad predicament.
Daraz Prepares to Lay Off 11% of Workforce
The new came through the Chief Executive Officer, Bjarke Mikkelsen as he informed the employees at the company today. He said in a statement:
“This decision has been made by myself and the leadership team to prepare the company for the current market reality and to ensure that Daraz will thrive in the long term to achieve our vision. For the last 5 years, we have been following our long-term business plan and increased our active shoppers from 3 million in 2018 to more than 15 million today, with average order growth of almost 100% until last year. We came out of COVID strong thanks to all the hard work and dedication of everyone on the team. I can’t thank you enough for this!”
“However, in the last 12 months, the market environment turned and became extremely difficult with a war in Europe, huge supply chain disruptions, soaring inflation, increasing taxes, and removal of essential government subsidies in our markets. Despite these headwinds, we are still growing our business and we have made big progress on our unit economics in the last 12 months. Essentially, we are improving our services faster than that market can hold us back, and this makes me incredibly proud,” Mikkelsen stated.
He also said this change was necessary as they needed to adjust to the current conditions and they have to cut costs and increase their profitability. They had to change their investment strategy across Nepal, Sri Lanka, Bangladesh, and Pakistan.
It is still unclear if the company will lay off an equal percentage of the workforce from each of these countries or if Pakistan will take most of the brunt. The laying off of the workforce will begin this week and will come straight from leadership teams in all countries.