According to a recent source, Bjarke Mikkelsen, the Chief Executive Officer (CEO) of Daraz, Pakistan’s largest e-commerce company, is leaving the corporation after eight years of dedicated service following the implementation of a reduction strategy. Daraz is now implementing cost-cutting initiatives which include a decrease in staff of at least 25%, affecting employees at all levels of management.
Today, Bjarke officially declared his resignation from Daraz, stating that he wants to prioritize his family and devote more time to his personal life. James Dong, the CEO of Lazada Group, a subsidiary of Alibaba, will temporarily take on the position of interim CEO at Daraz. Bjarke conveyed his utmost well-wishes for the company’s ongoing prosperity in the fiercely competitive e-commerce industry and emphasized the significance of a more profound integration between Daraz and its affiliated enterprises.
Interim CEO James Dong will focus on enhancing the cooperation among Daraz and its affiliated firms, such as Lazada, Trendyol, AliExpress, and Alibaba.com. The corporation perceives this action as a component of its comprehensive strategy to effectively negotiate the complexities of the ever-changing e-commerce sector.
According to sources within Daraz, as reported by Profit, Bjarke acted as a symbolic leader in the company, carrying out choices made by Alibaba. Bjarke, who has a finance background, played a crucial role in driving Daraz’s expansion and notoriety in the e-commerce markets of Pakistan, Bangladesh, Myanmar, Nepal, and Sri Lanka.
During the ongoing organizational changes, rumors are circulating that Trendyol, a Turkish e-commerce company majority controlled by Alibaba with a stake of over 86%, may acquire Daraz. This prospective acquisition is in line with Alibaba’s strategic maneuvers within its portfolio of entities.
The labor downsizing decision is a result of Daraz’s desire to decrease expenses, reflecting the cost-cutting methods seen in several Alibaba organizations. The previous CEO of Daraz declared a worldwide employment reduction of 11% last year, attributing it to factors such as geopolitical crises, supply chain disruptions, inflation, taxes, and subsidy eliminations. The objective of this restructuring was to improve profitability, simplify the organization, and increase efficiency.
Reports indicate that Daraz incurred group-level losses amounting to $143 million in 2022. This represents a substantial rise from $113 million in the preceding year. Furthermore, it highlights the necessity for strategic modifications in reaction to market changes.