Regional logistics firm Ninja Van has announced a bout of layoffs. It has let go of 21 employees from its tech division in Singapore, representing about 10% of the regional tech team and 20% of the local tech team.
The layoffs were announced on Monday (Apr 29) during a mandatory “all-hands” meeting for the tech team at 2pm, according to a Ninja Van employee who wishes to remain anonymous.
Following the meeting, the tech team was sent a follow-up email by Tee Chee Han, vice president of engineering at Ninja Van who said that the decision to lay off members of the team was a difficult one.
“Layoffs are an absolute last resort and we have done all we can to cut costs across the organisation but sadly it still wasn’t enough. To position ourselves for long-term success, we unfortunately have to eliminate some roles from Singapore,” said the email by Tee.
The email also noted that the company is not cutting the size and capability of the tech team, but optimising the cost of it. The company also remains upbeat on the long-term outlook of the business, particularly the potential of the B2B restock and cold chain initiatives.
“Cost optimisation has always been an ongoing lever to ensure Ninja Van Group’s sustainable growth. In line with the Group’s direction, our tech department has been actively implementing cost-control measures, including infrastructural reorganisation and outsourcing,” says a Ninja Van Group spokesperson in a statement.
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“Following a recent cost evaluation, it was determined that less than 10% of the region’s tech team is no longer required. Affected employees have received a reasonable severance package to support their transition beyond Ninja,” adds the spokesperson.
Employees affected were given a month’s salary for every year of service with the company, above the average of what is stipulated by the Ministry of Manpower (MOM) of two weeks for every year of service. They would still have access to the office and their G-chat until the end of the week to facilitate farewells and handovers, after which, they will be on garden leave until their official last day of May 31.
Employees affected will also be given a year’s extension, from 30 days, to exercise their vested options, while medical insurance and mental health support are also offered until June 30. The affected employees are also offered job placement support.
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Not a big surprise
The logistics provider has been underperforming of late.
In March, Ninja Van announced that it has put plans for an initial public offering (IPO) on the back burner.
The Alibaba Group Holding-backed delivery company is focusing on improving its profitability before going ahead with its IPO, said CEO Lai Chang Wen in a press event back then. The company expects to reach positive earnings before interest, taxes, depreciation and amortisation in 12 months.
It said that it was considering further rounds of fundraising to expand its business and is prepared to accept a lower valuation.
Ninja Van is steadily moving away from aggressively growing its lower-margin e-commerce business to build logistics capabilities into the business-to-business segment, where it predicts better profitability and less intense competition, the CEO said.
Founded in 2014, Ninja Van operates in six markets in Southeast Asia and delivers more than 2 million parcels a day in the region, according to its website.
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It raised US$578 million ($773.5 million) in a Series E round in 2021 from participants including Alibaba and B Capital Group, the venture capital firm set up by Meta’s co-founder Eduardo Saverin. The round lifted the company’s valuation to well beyond US$1 billion, Bloomberg News reported earlier.
Some of Ninja Van’s notable clients include Alibaba’s Southeast Asian e-commerce arm Lazada and Sea’s e-commerce unit Shopee. Both e-commerce companies which have gone through massive layoffs.
In January, Lazada underwent a massive layoff across all its markets, including Singapore.
On Apr 29, Yahoo also announced that it will lay off all journalists and social media executives in Singapore in a bid to change its editorial strategy.
See more: Yahoo to lay off all journalists, social media executives in Singapore
