Carousell cuts 110 jobs to rein in costs as growth slows, Latest Singapore News - The New Paper

Carousell cuts 110 jobs to rein in costs as growth slows

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Home-grown online marketplace Carousell cut 110 jobs on Thursday, or 10 per cent of the firm’s total headcount, as part of efforts to rein in costs amid dimmed growth prospects.

Only some business units would be affected, said co-founder and chief executive Quek Siu Rui on Thursday in an e-mail sent to all employees and uploaded on the group’s media portal.

He did not specify the affected units or the number of workers laid off in Singapore.

Those affected were informed via an e-mail that invited them for a meeting with a team leader and a human resources business partner, said Mr Quek.

“I am deeply sorry for this outcome, and I take responsibility for the decisions that have led us here,” he added.

All affected regular employees will be paid a minimum of three months’ salary, receive cash in lieu of their remaining paid time off and have their medical benefits extended till June 30, 2023, among other measures, said Mr Quek.

Those with a tenure of between six months and a year, and who hold employee stock options, will have the vesting for 25 per cent of their stocks accelerated.

Mr Quek also said that the company will hold a meeting on refinements to the company’s strategy, built on what it has learnt from the current exercise.

The Straits Times has contacted Carousell for more details.

Eager to reignite growth in its core classifieds business after Covid-19 lockdowns eased, as well as ramp up new initiatives to make transactions more convenient and trusted, the firm created more teams and hired new employees, said Mr Quek in the e-mail.

“Looking back, I’d made the following critical mistakes: First, I was too optimistic about the pace of our impact versus our increase in investments.

“The reality is that we were quick to grow our expenses and hire, but the returns took longer than expected.

“Second, while it is easy to blame market conditions, I also underestimated the impact of growing our team size too quickly - larger teams lead to lack of clarity in decision-making and the additional coordination required to get things done.”

Mr Quek also said that high inflation, geopolitical risks and supply chain disruptions continue to challenge the global economy and dampen growth expectations, with a broad-based slowdown expected in 2023.

He said leaders in the company, including himself, had spent the last few months finding ways to cut as much costs as possible without affecting workers, such as moving to an office with significantly lower rent, and having voluntary pay cuts.

However, the moves were “far from enough”, Mr Quek said.

“As we do not know when market conditions will improve, it is only prudent that we get to profitability as a group as quickly as possible, to be masters of our destiny and build an enduring company,” he said.

“It is important to act swiftly, course correct, and right size our investment levels to better align with this new reality.”

In a statement, the Creative Media and Publishing Union (CMPU), which is the union for e-commerce employees in Singapore, said they are working closely together to ensure that the retrenchment exercise is fair, transparent and responsible.

The National Trades Union Congress-affiliated union added that Carousell and itself are working closely with NTUC’s Employment and Employability Institute to provide employment assistance, including career coaching and job matching services for affected employees.

“The union stands in solidarity with the affected employees, and its immediate priority is to continue working closely with Carousell to ensure that these workers receive the necessary assistance and support.”

The job cuts at Carousell follow a spate of high-profile layoffs at major tech employers, including Sea’s Shopee, Meta and Stripe, as the global economic outlook darkens from when expansion plans were set in motion.

The Carousell group reached unicorn status after it raised US$100 million (S$135 million) at a US$1.1 billion valuation in September 2021.

Carousell saw revenue triple in 2020, but growth slowed last year to 21.8 per cent with turnover at US$49.5 million (S$67 million), Tech in Asia reported on Thursday.

Still, the privately-held company narrowed pre-tax losses by 33.5 per cent to US$43.9 million as it slashed expenses by 14.4 per cent to US$95.4 million.