Lazada cuts about 5% of workforce, a sign of maturing e-commerce sector in S-E Asia

[SINGAPORE] E-commerce platform Lazada said on Tuesday (Jun 23) that it has laid off some of its workforce after reviewing certain roles in its regional markets.

The Business Times understands that this affects about 5 per cent of Lazada’s workforce across South-east Asia.

Lazada did not disclose which roles were affected, though it said that the review was based on business needs, role requirements and organisational efficiency.

BT understands that the cuts are not part of any artificial intelligence initiatives.

Lazada is in six South-east Asia markets: Singapore, Malaysia, Thailand, Indonesia, Vietnam and the Philippines.

Affected employees will be treated in line with applicable requirements in the respective markets, said the e-commerce platform.

Lazada’s latest move follows layoffs at e-commerce rival Shopee earlier in June. Shopee cut about 8 per cent of its developer workforce.

Another e-commerce rival Amazon also cut its workforce in Singapore as it shuttered its grocery delivery business here and shifted priorities as customers preferred its international selection.

Lazada last laid off employees in January 2024, when both senior and junior workers across local and regional roles were affected.

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In Singapore, Lazada said, it will be working with the Food, Drinks and Allied Workers Union (FDAWU) to “ensure that the process is handled responsibly, and support is accorded to affected employees”. In other markets, the company is working with relevant government entities and agencies.

Lazada informed FDAWU in advance of the restructuring exercise, said general secretary Sankaradass S Chami. This enabled the union to “work closely” with Lazada management to support affected employees through the transition.

Affected union members will get a year of union membership and training grant support.

Sankaradass said: “The union will also work with the company to ensure the exercise is conducted responsibly, in accordance with the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment and NTUC’s Fair Retrenchment Framework.”

This restructuring exercise appears to be an effort at organisational optimisation, said Li Jianggan, founder of consultancy Momentum Works. The e-commerce sector in South-east Asia has matured, with platforms focusing on efficiency, profitability and organisational agility, he added.

This makes the recent layoffs at Lazada and Shopee less surprising.

“Compared with some of the more aggressive reductions we have seen elsewhere in the industry, Lazada’s latest adjustment appears relatively measured,” said Li.

While AI is not the primary trigger for the layoffs, it is becoming an important part of Lazada’s strategy, Li noted. The e-commerce platform has been one of the most active adopters of AI in South-east Asia, and this would inevitably influence team structure and organisational priorities. This situation is also different from the ongoing cuts at e-commerce giant Amazon.

“Amazon’s workforce discussions are increasingly centred on how AI changes the nature of white-collar work, whereas Lazada’s adjustment appears more reflective of a maturing South-east Asian e-commerce market where operational efficiency and execution have become higher priorities,” said Li.