Latest wave of layoffs make dent in e-commerce sector

Latest wave of layoffs make dent in e-commerce sector, illustration photo/ Source: freepik.com

Hundreds of employees working at Amazon and Lazada have lost their jobs only two weeks into the new year.

On January 10, Amazon announced plans to cut several hundred employees in its Prime Video and MGM Studios. At the same time, Amazon’s livestream platform Twitch also announced plans to lay off 35 per cent of its employees, equivalent to 500 people. About 100 Audible employees will also be forced to leave in the near future.

A week earlier, Lazada also began its latest round of lay-offs across Southeast Asia, with the number of affected employees likely reaching hundreds.

Lazada currently operates in Singapore, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.

According to TechinAsia, about 30 per cent of Lazada’s workforce will be affected, including senior managers in Singapore and Malaysia. Customer care, marketing, and commercial departments suffer the most. The move took place right after Lazada received an additional $634 million in capital from parent company Alibaba, bringing the total amount of money the Chinese corporation invested in this platform in 2023 to more than $1.8 billion.

In Vietnam, although there has not been an official response to the extent of the impact of the lay-offs, and Lazada declared that operations in Vietnam were still taking place normally. Information that Lazada Mall will temporarily suspend operations as previously reported by many media is inaccurate, the company said.

While the question of a large-scale restructuring is starting to arise in the e-commerce business sector, there is still no clear answer on whether there will be lay-offs in Vietnam. Representatives of the Alibaba Vietnam and Amazon Vietnam did not to respond to VIR’s inquiries, citing compliance with the group’s regulations.

E-commerce is one of the bright spots of Vietnam’s digital economy with a growth rate of 16-30 per cent per year and is among the top 10 most dynamic markets in the world. The scale of Vietnam’s e-commerce market reached $20.5 billion last year and is expected to continue in the next two years.

Tran Phuoc Tri, country manager of NodeFlair Vietnam, a career transparency platform, assessed that the technology industry labour market in Vietnam will be affected by the wave of global lay-offs, but not significantly.

He said that the need for human resources for positions related to AI, business analysis, and data analysis was increasing.

“Some Vietnamese companies that previously downsized are also planning to expand again in early 2024, while some foreign startups that want to enter Vietnam are also in need of employees,” Tri said. “However, it will not be until the second half of 2024 that the market will truly explode and expect to return to a period of strong growth like 2022.”

The wave of cost and personnel savings that began in 2023 is still continuing, showing that the technology industry has not yet been able to overcome its difficulties.

A number of major technology companies around the world also issued similar announcements to Lazada. Google announced that it would release hundreds of employees in the assistant and hardware departments. The technology company behind the foreign language learning application Duolingo, with more than 500 million users, also decided to release 10 per cent of seasonal workers to replace them with AI.

According to the tracking website Layoffs.fyi, 58 technology companies globally have already laid off about 7,800 employees this year. Last year there were over 262,000 lay-offs in the technology industry and the number for 2022 was about 165,000, according to the website’s calculations.

Competition rising for e-commerce postal services Vietnam’s postal market has grown strongly in recent years, from $1.2 billion in 2019 to nearly $2.5 billion in 2023. Of the sum, estimated revenue from package services and e-commerce services reached more than $1.6 billion, or 64 per cent of the total.

Traditional retailers buckle under strain The rapid development of e-commerce is causing a series of commercial townhouses to close down, while shopping centres still have a stable number of customers due to positive online sales channels and sharing turnover methods.