In the midst of a global pandemic and economic uncertainty, companies in the United States like Meta and Twitter have announced layoffs, and now it seems the trend has spread to Southeast Asia.
In the past month, several companies in the region have also let go of employees. Carousell, a Singaporean e-commerce platform, laid off an undisclosed number of workers in February. Glints, a job platform, also announced layoffs of about 12% of their workforce. Meanwhile, GoTo Group, a ride-hailing and delivery service provider, has laid off around 500 employees across the region.
These recent layoffs follow a larger trend in Southeast Asia. Over the last six months, Sea Group, a Singapore-headquartered conglomerate owns companies such as Shopee, has laid off over 7,000 employees. This represents about 10% of the company’s total workforce.
Jia Jih Chai, the co-founder and CEO of Rainforest, a Singaporean e-commerce platform, noted founders in the region are increasingly focused on budgeting and cutting costs amid worries of a potential recession due to slower demand this year.
Carousell’s recent layoffs are a concrete example of the challenges companies are facing. The company expanded too quickly, and as a result, operational costs increased, leading to the layoffs of several employees. This highlights the importance of careful planning and budgeting during uncertain times.
Businesses in different industries have become more aggressive in terms of branching out since Covid-19 regulations became more relaxed. However, customers are still preferring to shop online even with the easing of protocols. This has resulted in a slowdown in demand in the tech industry and has negatively impacted profitability forecasts.
Moreover, firms are now facing increasing interest rates and inflation, making them cautious of their operations. The rising costs of goods and services have forced companies to cut expenses, and this often means letting go of employees.
The current situation is challenging for companies and their employees. However, some are optimistic about the future. Jih Chai noted while the pandemic has brought many challenges, it has also opened up opportunities for new business models and growth – but still businesses have to be careful.