Tag: layoffs

  • Daraz Group plans layoffs amid market challenges

    Daraz Group plans layoffs amid market challenges

    In an internal communication obtained by Reuters on Tuesday, Alibaba-owned e-commerce platform Daraz Group revealed its decision to implement layoffs across the company.

    Acting CEO James Dong stated that the move aims to “adopt a more streamlined and agile structure” to address challenges faced by the company in the market.

    While the memo did not specify the exact number of individuals affected by the layoffs, it acknowledged the necessity of saying farewell to numerous valued members of the Daraz family.

    The company, operating in Pakistan, Bangladesh, Nepal, Sri Lanka, and Myanmar, declined to provide details on the percentage or absolute number of employees impacted.

    Last year, Daraz employed 3,000 individuals globally. However, the company had to reduce its workforce by 11% due to various challenges, including difficult market conditions, the Ukraine crisis, supply chain disruptions, inflation, higher taxes, and reduced government subsidies.

    James Dong emphasised the group’s commitment to addressing the market’s unprecedented challenges and stated, “Despite our efforts to explore different solutions, our cost structure continues to fall short of our financial targets. Facing unprecedented challenges in the market, we must take swift action to ensure our company’s long-term sustainability and continued growth.”

    Dong outlined the group’s strategy moving forward, highlighting a focus on improving the consumer experience.

    This involves diversifying the offerings of value-for-money products, expanding product categories, and enhancing the operational efficiency of sellers on the Daraz platform.

    The company, founded in Pakistan in 2012 as an online fashion retailer, was acquired by Chinese internet giant Alibaba in 2018. James Dong assumed the role of acting CEO in January, succeeding outgoing CEO Bjarke Mikkelsen.

    Mikkelsen had previously noted that Pakistan and Bangladesh are the group’s largest markets.

    Daraz Group, encompassing e-commerce, logistics, payment infrastructure, and financial services, serves more than 30 million shoppers, boasts 200,000 active sellers, and collaborates with over 100,000 brands, according to company statements provided to Reuters.

  • Dukaan CEO lays off 90% of his support staff in favour of AI chatbot

    Dukaan CEO lays off 90% of his support staff in favour of AI chatbot

    Suumit Shah, founder and CEO of Bangalore-based e-commerce startup Dukaan, announced via his Twitter account that he has laid off 90% of his customer support staff in favour of using an AI chatbot. 

    The bot was built by one of the firm’s data scientists, and according to Shah was able to respond to initial queries instantly, compared to the average staff time of one minute and 44 seconds.

    In his tweet, Shah admitted that the layoffs were “tough, but necessary”, explaining that given the state of the economy, startups are prioritising “profitability”.  

    Customer Support has apparently been a long-time struggle for Dukaan. In a conversation with CNN, Shah said that the company had cut the cost of its customer support function by 85% after introducing AI technology. He reasoned that this part of the business had been problematic for some time, with delayed responses and limited availability of staff at critical times, among other issues.

    That’s what prompted Shah to come up with the idea to create a personal AI-assistant for Dukaan, which would answer customer queries instantly, precisely, and from anywhere. Dukaan’s AI-lead Ojasvi Yadav stepped up to the plate.

    According to Shah’s Twitter thread, just a day after the bot was launched, Dukaan’s AI chatbot ‘Lina’ had resolved 200 lives chats and 1400 support tickets. The success of Lina propelled the team to create Dukaan’s new product ‘BOT9.ai’. It is an AI assistant, that can learn the ins-and-outs of a business, and answer customer queries instantly, 24/7. 

    As Shah tweeted, “it’s less magical, sure, but at least it pays the bills!”

    Considering the era of AI we are in now, and the general widespread layoffs by tech giants, Shah’s decision had been met with much criticism. However, Shah continued to justify the layoffs by emphasizing how AI technology can optimise their operations. 

    Moreover, Shah believes that allocating employees’ expertise to areas requiring critical thinking, while relegating routine tasks to AI-powered chatbots, improves efficiency while also allowing for a better allocation of human resources.

    Many Twitter users were enraged at the apparent pride in Shah’s tweets. One user tweeted, “You disrupted the lives of 90% of your support team & you’re celebrating it in public. You also likely destroyed your customer support (disprove with good CSAT for the bot) – all for a basic ChatGPT wrapper. This is a new low even for you.” 

    While the announcement may read as apathetic, it is not surprising that major companies are turning to AI to improve general performance and efficiency in what are considerably quite routine tasks. 

    According to a report from outplacement firm Challenger, Gray & Christmas, which looks at layoffs across every industry, around 5% of May’s job cuts in 2023 were directly related to artificial intelligence. 

    Are you worried AI is going to replace you at work?

  • AI’s disruptive power hits tech industry: Job cuts and demand for AI experts

    AI’s disruptive power hits tech industry: Job cuts and demand for AI experts

    The rise of artificial intelligence (AI) has sparked concerns about job displacement in the future. However, it is already having an impact in the tech industry, where employees once seemed secure in their positions. 

    A growing number of tech companies are attributing layoffs and reevaluations of new hires to AI advancements happening right in Silicon Valley.

    For example, Chegg, an education technology company, recently announced in a regulatory filing that it would be cutting 4 per cent of its workforce, around 80 employees. The reason given was to align the company with its AI strategy and create sustainable value for students and investors.

    IBM’s CEO, Arvind Krishna, stated in a May interview with Bloomberg that the company plans to pause hiring for roles that could be potentially replaced by AI in the future. However, in a subsequent interview with Barrons, Krishna clarified that his comments were taken out of context, emphasising that AI will generate more jobs than it eliminates.

    In late April, Dropbox, a file-storage service, revealed that it would be reducing its workforce by approximately 16 per cent, or 500 employees, also citing AI as a factor. Outplacement firm Challenger, Gray & Christmas reported that in May alone, 3,900 individuals were laid off due to AI, marking the first time job cuts were specifically attributed to this factor. All of these layoffs occurred within the tech sector.

    These developments in Silicon Valley not only demonstrate its leadership in AI development but also provide insight into how businesses might adapt to these tools. Rather than rendering entire skill sets obsolete overnight, AI is currently compelling companies to redirect resources to maximize its potential. Consequently, workers with AI expertise are in high demand.

    Dropbox CEO Drew Houston, in a note announcing the job cuts, acknowledged that AI has captured people’s imagination and expanded the market for AI-powered products. He highlighted the need for a different skill set, particularly in AI and early-stage product development, for the company’s future growth.

    Dan Wang, a professor at Columbia Business School, believes AI will lead to organizational restructuring but does not foresee machines entirely replacing humans just yet. He suggests that AI enhances human work rather than replaces it. Wang argues that the real competition lies in human specialists who can effectively leverage AI tools.

    Overall, the influence of AI is already evident in the tech industry, prompting companies to adapt their strategies and prioritize workers with AI expertise, rather than causing immediate job obsolescence.

  • Spotify announces second round of layoffs, cutting 200 jobs in podcast unit amid restructuring efforts

    Spotify announces second round of layoffs, cutting 200 jobs in podcast unit amid restructuring efforts

    On Monday, Spotify Technology announced its intention to implement a second wave of redundancies, resulting in the reduction of 200 positions within its podcast unit. This strategic restructuring follows a prolonged period of substantial investment, as the company seeks to adapt its business model accordingly.

    This decision affects approximately 2 per cent of the music-streaming giant’s workforce, bringing Spotify in line with other prominent industry players such as Meta Platforms and Roku. These companies, facing an uncertain economic landscape, have also resorted to similar measures by implementing a second round of job cuts.

    During early trading, the shares of this Sweden-based organisation exhibited a modest increase of approximately 0.5 per cent, outperforming the relatively subdued performance of the broader market.

    In recent years, Spotify has actively pursued the expansion of its podcast business, anticipating that the format’s heightened engagement levels would attract a larger number of advertisers. However, this ambitious endeavour resulted in a surge of the company’s operating expenditure, growing at twice the rate of its revenue last year. Furthermore, rising interest rates and persistent inflation have prompted businesses to curtail their advertising expenditures.

    Consequently, earlier in 2023, Spotify took the decision to reduce its workforce by 6 per cent, while also announcing the departure of Dawn Ostroff, a pivotal figure in shaping the podcast business. Ostroff adeptly navigated the company through contentious episodes, including the controversies surrounding Joe Rogan’s show and its alleged dissemination of misinformation concerning COVID-19.

    In light of these circumstances, Sahar Elhabashi, the head of Spotify’s podcast business, conveyed on Monday that the company has reluctantly but necessarily opted for a strategic realignment. This course of action aims to address the prevailing challenges and align the organisation with its evolving objectives.

    Additionally, Spotify unveiled its plan to consolidate the Parcast and Gimlet studios into a unified entity known as Spotify Studios. This amalgamation will oversee the production of Spotify originals. Elhabashi emphasised that the company intends to adopt a bespoke approach tailored to each individual show and creator, departing from the previously uniform approach.

    By undertaking these measures, Spotify aims to optimise its operations, remain agile in a dynamic market, and position itself for sustained success in the podcast industry.

  • Crisis on wheels: Pakistan’s automotive industry grapples with mass layoffs and 70% sales drop

    Crisis on wheels: Pakistan’s automotive industry grapples with mass layoffs and 70% sales drop

    The automotive industry in Pakistan is facing a severe setback as thousands of workers were laid off due to a decline in vehicle and spare parts sales. The government’s ban on raw material imports, coupled with the depreciation of the rupee and soaring inflation, has caused a significant strain on the industry. With foreign exchange reserves dwindling and the local currency hitting historic lows against the US dollar, the economic crisis has reached unprecedented levels.

    Pakistan finds itself in the midst of its most formidable economic crisis to date, as the State Bank of Pakistan’s foreign exchange reserves have plummeted to a mere $4 billion. This amount is barely sufficient to cover three weeks of imports, raising concerns about the country’s economic stability. The ban on raw material imports, implemented to prevent the outflow of US dollars, has caused a sharp decline in industrial output and triggered widespread layoffs and unemployment.

    Dollar crunch and inflation

    In the midst of the worsening dollar crunch, commercial banks have also halted the opening of letters of credit (LCs), leaving importers in a state of uncertainty regarding the provision of the necessary funds for already placed orders. This further exacerbates the challenges faced by the automotive industry, hindering its ability to procure essential raw materials and sustain production.

    The country is grappling with soaring inflation rates, which surpassed 36 per cent in April, the highest recorded since 1964. As a result, consumer purchasing power has diminished significantly, leading to a sharp decline in vehicle sales. Munir Karim Bana, Chairman of the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM), laments the dire situation, stating that thousands of workers have been laid off, and production has ground to a halt. The closure of auto manufacturing plants has further exacerbated the industry’s challenges.

    Auto parts manufacturers are grappling with demurrage charges as raw materials worth billions of rupees remain stuck at the Karachi port. PAAPAM, responsible for supplying approximately 90 per cent of local vehicle parts, is bearing the burden of these charges. Furthermore, with production units closed, income streams have dried up, exacerbating the financial strain on the industry.

    Rana Ihsan Afzal, the coordinator to Prime Minister Shehbaz Sharif on commerce and industry, acknowledges that the automotive industry’s full efficiency may not be restored until the revival of the IMF bailout program. As a sector heavily reliant on imports and foreign currency, the automotive industry is particularly vulnerable to the country’s economic challenges. The delay in the staff-level agreement on the ninth review of the IMF bailout deal signed in 2019 has further hampered the industry’s prospects.

    Revival prospects and government assurance

    Amid the decline in sales and mass layoffs, the coordinator to the Prime Minister expressed his concern but assured that the government is tirelessly working to revive the economy. The coordinator acknowledges the temporary phase that necessitates import restrictions on the automotive industry to protect foreign exchange reserves. However, he remains optimistic that once reserves are replenished, the industry will experience a significant upturn.

    Pakistan’s automotive industry is facing a dire crisis, with plummeting sales, layoffs, and manufacturing plant closures. The ban on raw material imports, along with the economic challenges of soaring inflation and dwindling foreign exchange reserves, has pushed the industry to the brink. Despite the difficulties, the government is committed to revitalizing the sector and assuaging the concerns of manufacturers.

  • McDonald’s temporarily closes US offices ahead of layoffs announcement

    McDonald’s temporarily closes US offices ahead of layoffs announcement

    McDonald’s, the fast-food chain, will temporarily close its US offices this week to inform its corporate employees about layoffs as part of a broader company restructuring.

    Last week, the company sent an internal email to its US employees and some international staff requesting that they work from home on Monday through Wednesday to communicate staffing decisions virtually. It is currently unknown how many employees will be affected by the layoffs.

    The Chicago-based company stated in the message that it would communicate “key decisions related to roles and staffing levels across the organization” during the week of April 3. The report also indicated that McDonald’s asked its employees to cancel all in-person meetings with vendors and other outside parties at its headquarters.

    In January, McDonald’s had previously announced that it would review corporate staffing levels as part of an updated business strategy that could result in layoffs in some areas and expansion in others.

    McDonald’s is expected to start announcing key decisions this week.

  • Yahoo announces major layoffs, 20% of staff to be affected

    Yahoo announces major layoffs, 20% of staff to be affected

    Yahoo announced in a statement on Thursday that they will be cutting more than 20 per cent of their workforce by the end of 2023, starting with the elimination of 1,000 positions this week.

    The company, which was acquired by private equity firm Apollo Global Management in September 2021, had a headcount of around 10,000 employees at the time of acquisition, according to PitchBook data.

    However, recent reports by Axios indicate that the current headcount may be closer to 8,000 employees, with more than 1,600 workers set to lose their jobs in the latest round of cuts.

    The recent layoffs at Yahoo are part of the company’s plan to simplify its advertising unit’s operations. A spokesperson for the company stated that the strategy for the Yahoo for Business segment failed to meet the company’s expectations in all aspects. These layoffs are a step towards rectifying the situation and ensuring the business segment operates more efficiently.

    “Given the new focus of the new Yahoo Advertising group, we will reduce the workforce of the former Yahoo for Business division by nearly 50 per cent by the end of 2023,” a Yahoo spokesperson told CNBC.

    Yahoo announced that it will redirect its focus to its long-standing collaboration with Taboola, a leading digital advertising firm, to enhance its advertising services. The partnership between the two companies has existed for 30 years.

    “These decisions are never easy, but we believe these changes will simplify and strengthen our advertising business for the long run, while enabling Yahoo to deliver better value to our customers and partners,” the Yahoo spokesperson said.

    According to a statement made by a representative of Yahoo to CNBC, the company has announced plans to offer severance packages to its domestic employees who have been impacted by job loss. However, the company has not disclosed the exact amount or specifics of the severance packages being offered.

    Severance packages are typically offered by companies to employees who have been laid off or let go due to a reduction in workforce, restructuring, or other reasons. These packages typically include a combination of financial compensation and benefits, such as continued health insurance, unemployment assistance, and outplacement services.

    The size and value of the severance package will depend on factors such as the employee’s length of service, position, and company policies. In the case of Yahoo, without specific details on the size or value of the severance packages, it is difficult to determine what the employees can expect to receive.

  • Daraz Group to reduce 11% workforce in response to challenging market conditions

    Daraz Group to reduce 11% workforce in response to challenging market conditions

    Daraz Group, an e-commerce subsidiary of Alibaba Group, will be reducing its workforce by 11 per cent in response to the challenging market conditions.

    The CEO, Bjarke Mikkelsen, noted the adverse impact of a war in Europe, significant supply chain disruptions, rising inflation, heightened taxes, and the elimination of crucial government subsidies on the company’s operations, which are in Pakistan, Bangladesh, Sri Lanka, and Nepal.

    Daraz, which was founded in Pakistan in 2012 and acquired by Alibaba in 2018, is the largest e-commerce platform in Pakistan and serves over 100,000 SMEs in the country.

    According to Ehsan Saya, Managing Director of Daraz in the country, Pakistan remains the company’s largest market with the largest number of employees across its markets.

    He adds, “almost one-third of the staff in Pakistan is from regional teams which work with teams in Bangladesh, Nepal, Sri Lanka, Myanmar, Singapore, and China.”

    Ehsan Saya confirmed to Reuters that the 11 per cent reduction in the workforce of Daraz Group will also result in an equivalent cut in its workforce in Pakistan. The group did not provide further details regarding the specific number of employees affected and further details on the restructuring.

    In a letter, CEO Bjarke Mikkelsen stated that Daraz has been able to grow its active shopper base from three million in 2018 to over 15 million currently, with an average order growth of nearly 100 per cent until last year. The company reported having access to 500 million customers in 2021 and a workforce of 10,000 employees. In the past two years, Daraz has invested $100 million in Pakistan and Bangladesh.

  • Amazon plans to lay off 10,000 employees due to declining sales

    Amazon plans to lay off 10,000 employees due to declining sales

    Amazon is reportedly getting ready to lay off thousands of office workers due to decreasing sales and worries about an impending recession.

    The e-commerce giant’s office personnel could lose about 10,000 of their employees, according to US media sources who requested anonymity.

    Cuts are anticipated to have an impact on departments like e-commerce and personal devices.

    The business warned it had overhired during the pandemic and had previously implemented a hiring freeze and stopped some of its warehouse expansions. Additionally, it has taken steps to close off some areas of its operations by shelving plans for things like a personal delivery robot.

    The business announced last week that cutting costs would be a priority in its annual review of business operations. “As part of this year’s review, we’re of course taking into account the current macro-environment and considering opportunities to optimize costs,” the e-commerce company said in a statement.

    According to media sources, the precise number of positions that will be eliminated is still uncertain.

    Amazon is battling a dip in online sales after the epidemic saw a surge in its revenue. Despite a 15 per cent increase in overall revenue in the most recent quarter, the company has remained concerned about the forecast as the slowdown spreads to other industries, including its long-profit-boosting cloud computing division, Amazon Web Services.

    On social media, the company’s founder Jeff Bezos, who is no longer serving as CEO but is still chairman of the board, declared that it was time to “batten down the hatches.”

    Amazon joins a long list of other tech firms that have announced layoffs in an effort to signal an impending economic collapse. Included in the list is Meta, the parent company of Facebook, Instagram, and WhatsApp, which recently announced plans to eliminate 11,000 jobs, the largest reduction in staff in company history.

    According to a survey by Challenger, Gray & Christmas, which analyses such announcements, US-based tech companies have cut more than 28,000 jobs overall this year, more than double the number from a year ago.

  • After Twitter, Meta reportedly planning ‘large-scale’ layoffs this week

    After Twitter, Meta reportedly planning ‘large-scale’ layoffs this week

    With plans to layoff thousands of employees this week, Facebook parent company Meta will join a growing list of digital companies that are reducing their workforces.

    As of September 30, Meta has over 87,000 people working for it across its various platforms, which include the social media sites Facebook and Instagram as well as the messaging service WhatsApp. According to WSJ, the social media business had reduced its ambitions to hire engineers by at least 30 per cent in June, and Mark Zuckerberg had advised staff to prepare for a slowdown in the economy.

    In his announcement of Meta’s dismal third-quarter results, CEO Mark Zuckerberg stated that the company’s headcount will not rise by the end of 2023 and might even decline significantly.

    “In 2023, we’re going to focus our investments on a small number of high-priority growth areas. So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. In aggregate, we expect to end 2023 as either roughly the same size or even a slightly smaller organization than we are today,” Zuckerberg said on the last earnings call in late October.

    Profits for Meta dropped to $4.4 billion in the third quarter, a 52 percent year-over-year decline. The poor findings had a significant negative impact on Meta’s stock price, which dropped by 25 per cent in one day.

    Over the past year, the company’s market value has decreased to $600 billion.

    In a previous open letter to Mark Zuckerberg, Meta’s shareholder Altimeter Capital Management stated that the company needed to streamline by eliminating positions and capital expenditures. They also stated that investors had lost faith in Meta as a result of its increased spending and pivot to the metaverse.

    Owing to increased interest rates, rising inflation, and a European energy crisis, several technological businesses, including Microsoft Corp., Twitter Inc., and Snap Inc., have reduced workforce in recent months.