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In a recent announcement, Daraz, the eCommerce behemoth, has communicated its decision to part ways with “many valued members of the Daraz family,” citing an ongoing discrepancy between the company’s cost structure and its financial objectives. Reported by ProPakistani.
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Acting CEO James Dong delivered an official statement, emphasizing that this move was a measure of last resort after extensive efforts to manage costs and enhance operational efficiency over the past few years failed to meet financial targets. Dong highlighted the “unprecedented challenges” in the market, necessitating swift action to safeguard the company’s future sustainability and growth prospects.
Dong expressed gratitude towards the departing employees for their dedication and significant contributions to Daraz’s success, promising comprehensive support through severance packages, career assistance, and wellness initiatives. He also acknowledged the resilience of the continuing employees, stressing the importance of their role in navigating through these tough times.
The focus for Daraz moving forward, according to Dong, will be on improving customer experience through diversification of value-for-money products and expansion of product categories, along with enhancing seller operational efficiency on the platform. The aim is to build an efficient, agile organization capable of maintaining market leadership across its operating regions.
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Dong reaffirmed Daraz’s commitment to South Asia’s digital transformation and the belief in e-commerce’s potential to benefit businesses and consumers across the region. He expressed confidence in the remaining team’s ability to continue making a significant impact through digital commerce.
This restructuring follows a pattern observed across the global e-commerce industry, where companies often scale up hiring during peak sales periods only to reduce workforce post-season. Notably, Daraz had previously cut its workforce by 11% the prior year, attributing the decision to challenging market conditions exacerbated by global events and economic pressures.
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The announcement comes in the wake of difficult market conditions influenced by various global and regional factors, including the Russia-Ukraine conflict, supply chain disruptions, and economic challenges affecting consumer spending and operational costs.
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