Lazada retrenchments: Workers' union was not notified or consulted

SINGAPORE: The union representing Lazada's workers has expressed disappointment at the company's latest retrenchment exercise, adding that it was not notified or consulted.

"The National Trades Union Congress (NTUC) and our affiliated union Food Drinks and Allied Workers Union (FDAWU) are deeply disappointed that Lazada has initiated a retrenchment exercise without notifying and consulting FDAWU, given that Lazada is unionised under FDAWU," said NTUC in a statement.

The FDAWU has written to Lazada stating that such a move is "unacceptable", and that the matter has been escalated to the Ministry of Manpower (MOM).

CNA understands that the layoffs – which began on Wednesday morning – are ongoing. Employees who spoke to CNA said some people were left in tears by the news and were baffled by the sudden announcement.

A Lazada spokesperson said on Wednesday evening that the company is "making proactive adjustments to transform our workforce", but did not answer questions about the extent of the layoffs and the reasons for the retrenchments.

CNA has contacted Lazada and MOM for their responses to NTUC's statement.

"NTUC stands by FDAWU and affected workers. We too are extremely disappointed in this move by Lazada," said the statement.

"NTUC would like to reiterate that it is critical for companies to work with their union to ensure that a fair and equitable process was carried out to safeguard the interests of all workers, especially our Singaporean core."

AVOID FESTIVE PERIODS FOR RETRENCHMENTS

NTUC said that while retrenchments "may be inevitable", it should only be used as a last resort.

Companies must exhaust all other options before making the call to retrench employees, it added.

The union appealed to companies to be "considerate about the timing of such exercises and to avoid doing such exercises during festive periods, as far as possible".

Lazada staff who spoke to CNA estimated that close to 100 people have been informed of their retrenchments so far, among the co-workers they have worked or interacted with. Those affected were from departments across the company.

They also said the retrenchment process was impersonal and could be more "humane".

Some employees added that the severance package was lower than expected and worse than what other tech companies – such as Shopee and Grab – had offered to their employees who were laid off last year.

Digital Industry Singapore, a government office that supports the growth of the technology sector, said on Wednesday it is working with Lazada and other government agencies to assist affected employees with alternative employment opportunities.

Firms who are retrenching workers must "ensure openness, transparency, and consultation with unions and workers", NTUC said.

They should observe the guiding principles in NTUC's Fair Retrenchment Framework and the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment.

"NTUC would like to assure affected workers that you are our priority," it said.

It advised affected workers to approach FDAWU for help. 

Founded in 2012 by Rocket Internet, Lazada was acquired by the Alibaba Group in 2016. Lazada Singapore is the regional headquarters of Alibaba's e-commerce ventures in Southeast Asia.

It has a presence in six countries in the region – Indonesia, Malaysia, the Philippines, Thailand and Vietnam.

Last March, Alibaba announced significant restructuring and split into six business groups. Lazada now comes under Alibaba International Digital Commerce, alongside other e-commerce platforms AliExpress, Trendyol and Daraz.

In December last year, Alibaba Group announced an additional US$634 million investment into Lazada.