Cost-Cutting Measures: Daraz Implements Workforce Reduction, CEO Bjarke Mikkelsen Exits

In the wake of Daraz, Pakistan’s largest e-commerce company, implementing a downsizing plan, Chief Executive Officer (CEO) Bjarke Mikkelsen bids farewell to the organization after eight years of dedicated service, according to a recent report. Daraz is reportedly undergoing cost-cutting measures that involve workforce reduction by at least 25%, spanning from top to bottom management.

Earlier today, Bjarke formally announced his departure from Daraz, citing a desire to prioritize his family and dedicate more time to his home life. In his place, James Dong, the CEO of Lazada Group, another subsidiary of Alibaba, will be assuming the role of acting CEO at Daraz. Bjarke expressed his best wishes for the company’s continued success in the competitive e-commerce landscape and highlighted the importance of a deeper integration between Daraz and its sister companies.

Cost-Cutting Measures: Daraz Implements Workforce Reduction, CEO Bjarke Mikkelsen Exits

Interim CEO James Dong will work on strengthening the collaboration between Daraz and sister companies, including Lazada, Trendyol, AliExpress, and Alibaba.com. The company sees the move as a part of its broader strategy to navigate the challenges of the evolving e-commerce market.

Sources within Daraz, as reported by Profit, suggest that Bjarke served as a figurehead in Daraz, implementing decisions from Alibaba. Bjarke, with a background in banking, played a pivotal role in Daraz’s growth and prominence in the e-commerce markets of Pakistan, Bangladesh, Myanmar, Nepal, and Sri Lanka.

Amidst the organizational changes, there are speculations that the Turkish e-commerce company, Trendyol, which is approximately 86% owned by Alibaba, might take over Daraz. This potential acquisition aligns with Alibaba’s strategic moves within its portfolio of entities.

The decision to downsize the workforce comes in the backdrop of Daraz’s plan to reduce expenses, mirroring cost-cutting strategies observed across various Alibaba entities. Last year, Daraz’s former CEO announced a global reduction in workforce by 11%, citing reasons such as geopolitical conflicts, supply chain disruptions, inflation, taxes, and subsidy eliminations. This restructuring aimed at enhancing profitability, streamlining the organization, and boosting efficiency.

According to reports, Daraz faced group-level losses of $143 million in 2022. This is a significant increase from $113 million in the previous year. It also emphasizes the need for strategic adjustments in response to market dynamics.

See Also: Daraz and Meezan Bank Partner to Drive Electric Bike Adoption in Pakistan