Tech group lay-off wave reaches Vietnam

After Meta, Amazon, Twitter, and Tesla, Xiaomi has become the next name to join the list of leading tech companies forced to cut staff. In a December 20 announcement, a Xiaomi representative confirmed that about 10 per cent of the total workforce will be affected by the reduction policy implemented by the company to "optimise full-time and organisational rationalisation".

Tech group lay-off wave reaches Vietnam, illustration photo/ source freepik.com

Xiaomi had over 35,300 employees as of the end of September, according to its third-quarter earnings report. It is expected that about 5,000 Xiaomi employees will ultimately be affected in the near future, mainly those working in the smartphone and internet service business units.

The decision by the fifth-largest smartphone vendor in the Chinese market comes after seeing a 9.7 per cent drop in Q3 results on-year.

Xiaomi is not the only tech company in Asia to start laying off staff. A week earlier, online commerce platform Carousell Group also announced a 10 per cent cut in the number of employees in Singapore and Myanmar, equivalent to about 110 positions. Carousell is a multicategory platform for second-hand items in Greater Southeast Asia, Hong Kong, and Taiwan, established in 2012.

CEO Quek Siu Rui admitted to being "too optimistic" when assessing economic recovery, while underestimating the impact of developing the team too quickly. Rui noted that Carousell's management will also take a voluntary pay cut.

In early November, Indonesia's GoTo Group, born from a merger of ride-hailing platform Gojek and e-commerce platform Tokopedia, also announced the reduction of 1,300 jobs, or about 12 per cent of employees.

Meanwhile, the parent company of e-commerce site Shopee, Sea Group, has let go of over 7,000 employees in the past six months, with business operations affected by the economic downturn.

The fluctuations in the tech job market in neighbouring countries have begun to affect Vietnam, especially as the country is also facing a wave of lay-offs of unskilled workers in fields such as manufacturing electronic components, textiles, and leather. According to statistics from the Ministry of Labour, Invalids, and Social Affairs, more than 50,000 workers have lost their jobs in just the past few weeks.

Although there is no official data on the number of employees losing their jobs in the tech sector specifically, representatives of some tech startups admitted to VIR that reductions may take place. However, it will not be as massive as neighbouring countries because most Vietnamese tech businesses and startups are looking to ensure personnel stability.

Ecommerce platform Cho Tot, a subsidiary of Carousell Group in Vietnam, said it has no plans to cut staff for the next six months despite difficulties in the market and shrinking costs from the parent group.

"A strong, committed, and talented team is the key foundation for Cho Tot to get through this tough time and transform in the near future," said Ruby Hoang, chief growth officer of Cho Tot.

Cho Tot was established in 2013 and boasts more than 10 million users, as well as more than one million items listed for sale every month.

Lam Thi Bach Tuyet, human resources director of UrBox, an e-commerce startup in the gift industry, admits that the company will strive to ensure the best benefits for employees in 2023, despite the overall negative impact from the market.

"Depending on the spending of our biggest customers, we have several scenarios in terms of staffing plans. We are very careful not to get caught up in a wave of lay-offs because human resources are a prerequisite to running the company and helping us stand out in today's market," Tuyet said.

In the e-gift market, UrBox is being evaluated as a bright face in the Vietnamese e-gift market with financial support from prestigious investment funds such as Touchstone Partners, Pavilion Capital, and VinaCapital Ventures.