The global recession has started to hit Pakistani IT Industry too.
CEO Daraz Bjarke Mikkelsen recently said that the company is cutting off 11% of its workforce. He said, “In the last quarter of 2022, funding declined causing job layoffs, starting with Daraz in Pakistan ”
Nasheed Malik, Topline Securities ICT analyst told the media, “Startups have prioritised growth over profitability and cash flow, leading to a continuous cash burn.”
He further said that Daraz initially focused on customer acquisition and then diverted it’s preference to app growth, not caring too much about the profits for the first decade. However, the recent economic crunch is forcing the company to get rid of employees who are not directly related to the profit generating business units.
“Startups in Pakistan are now limiting themselves to their core business to maintain profits and cash flow, slashing workforce from future projects or removing highly paid experts.”
MD Daraz Pakistan Ehsan Saya told the employees, “Daraz is restructuring to ensure we continue to grow in the future.”
Daraz was formed in 2012 and was later acquired by Alibaba in 2018. It serves to more than 500 million customers across Pakistan and has 100,000 SMEs.
Startups funding expert, Kapeel Kumar said, “I predict more layoffs in future due to poor economic conditions and an unstable rupee-dollar exchange rate.”
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