Zalora has laid off around 100 employees across Southeast Asia, amounting to about 15% of its regional workforce. The move is part of what the company describes as an “organisational restructuring” aimed at streamlining operations and improving its financial position.

The layoffs were first reported by The Malaysianist and have since been confirmed by the company. Multiple markets in the region are affected, including Malaysia, where Zalora maintains a large warehouse and operations hub.

“These necessary structural changes reflect the need to adapt to a highly competitive market, recalibrate our energy, and streamline operations to ensure the financial health of Zalora,” the company said in a statement. It added that affected staff would be supported during the transition.

Market Shifts and Regional Competition Drive Downsizing

The company’s decision reflects a broader trend among Southeast Asian e-commerce players adjusting growth expectations in light of rising costs, shifting consumer behaviour, and increased competition. Zalora is contending with major horizontal platforms like Shopee and TikTok Shop, fast-fashion entrant Shein, and regional vertical players such as Pomelo (Thailand), Love, Bonito (Singapore), and HijUp (Indonesia).

Zalora, launched in 2012, was once positioned as Southeast Asia’s answer to ASOS. It is part of the Global Fashion Group (GFG), a European-listed company that also operates Dafiti in Latin America and The Iconic in Australia.

In recent years, Zalora has scaled back some of its operations. In 2018, it cut nearly its entire marketing team in Singapore and moved those functions to Kuala Lumpur. It also exited Vietnam and Thailand to concentrate on core markets including Malaysia, Singapore, Indonesia, the Philippines, Hong Kong, and Taiwan.

Revenue Up in 2023, But Profitability Declines Sharply

Based on financial filings reviewed by DATA VANTAGE, Zalora saw a 47.6% increase in revenue in 2023, growing to $46.23 million from $31.32 million in 2022. This marks a significant recovery in sales across its key markets.

However, the revenue gains were offset by a substantial drop in profitability. The company posted a loss of $10.83 million in profit before interest and tax (PBIT) in 2023, compared to a profit of $0.92 million in 2022. Losses widened further across other metrics, with profit before tax from continuing operations falling to negative $14.17 million, up from a loss of $1.46 million the previous year—an 869% increase.

These figures indicate that despite improved revenue performance, Zalora faced increased costs, inefficiencies, or market-related challenges that impacted its bottom line.

Restructuring Follows Widening Financial Losses

The growing losses in 2023 appear to have driven Zalora’s decision to implement job cuts in early 2025. As competition intensifies across the region’s e-commerce landscape, the company is under increasing pressure to recalibrate its operations and regain financial sustainability.

PHOTO: ZALORAINDONESIA

This article was created with AI assistance.