Tag: workforce restructuring

  • 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.

  • 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.