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Online marketplace Carousell has joined major tech companies in retrenching a sizeable number of its staff.

110 jobs, or 10 per cent of the firm's headcount, will be cut, said chief executive Quek Siu Rui in an email to employees on Dec. 1.

He did not specify which departments would be affected.

Critical mistakes made

In the email, which was also posted on the group's media portal, Quek apologised for the "critical mistakes" which had been made.

After emerging from Covid-19 lockdowns, the firm had been optimistic about recovery and launched into a spate of growth, which included hiring new staff.

But he had been "too optimistic about the pace of our impact versus our increase in investments," he admitted.

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

He added that he had underestimated the impact of too-rapid growth, which led to the lack of clarity in decision-making and additional bureaucracy.

Quek also pointed to a "worsening macroeconomic environment" as an additional hindrance to the firm's expected growth.

"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 summarised.

Measures took to cut costs

In an effort to cut costs, Carousell's leadership had taken a number of measures, including taking voluntary pay cuts and moving to a cheaper rental space.

"Yet, this is far from enough," he said.

Nevertheless, the consequent layoffs — which Quek called "a very difficult decision" — would be carried out with compassion and support, he said.

The support includes:

• A month's salary for every year of service, with a minimum compensation of three months' salary
• Extended medical benefits and insurance till Jun. 30, 2023, subject to approval by insurers and service providers
• Access to employment assistance and career counselling services

The Creative Media and Publishing Union (CMPU) said in a statement that it is working with Carousell to carry out the reorganisation in a "fair, transparent, and responsible manner".

Both organisations are also working with NTUC's Employment and Employability Institute to provide assistance in the form of career coaching and job matching services to affected employees.

Other layoffs

Last month, Amazon, Meta, Shopee, and Twitter each announced large-scale layoffs.

Experts told CNA that the tech sector is expected to remain volatile in the near future, amid geopolitical tensions and fears of a global recession.

This heightened caution cuts a sharp contrast to the pandemic-driven tech boom, which resulted in tech companies pursuing a "growth at all costs" mindset which led to mass hiring and spending.

However, job seekers with tech know-how will continue to remain sought-after, as demand outstrips supply within the region, experts said.

Top image from Carousell's website