Carousell lays off 110 employees amid worsening macroeconomic environment

Singapore’s leading mobile classifieds unicorn has laid off 110 employees (10 per cent of the group’s total headcount), citing a worsening macroeconomic environment.

Only workers of some business units are affected. The outgoing employees will be offered a month’s salary for every year of service, rounded up to the nearest half year. Everyone will have at least three months of compensation.

Announcing the job cuts in a blog post, Carousell Co-Founder and CEO Quek Siu Rui said: “As we emerged from the COVID-19 lockdowns of 2021 across key markets of our group, we were optimistic about the recovery to come and eager to reignite growth in our core classifieds business. Additionally, we doubled down on a number of new initiatives to make selling and buying more convenient and trusted, to make secondhand the first choice for even more people across the region. That meant creating more teams to work on these initiatives, which included new teammates that we had to hire.”

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“Looking back, I’d made the following critical mistakes: First, I was too optimistic about the pace of our impact versus our increase in investments. The reality is that we were quick to grow our expenses and hire, but the returns took longer than expected. Second, while it is easy to blame market conditions, I also underestimated the impact of growing our team size too quickly — larger teams lead to a lack of clarity in decision-making and the additional coordination required to get things done,” he continued.

Siu Rui admitted that the company saw the signs of a perfect long storm: high inflation, geopolitical risks and supply chain disruption as early as March this year.

In recent weeks, things have taken a turn for the worse. The global economy continues to face steep challenges, with economists expecting a broad-based slowdown in 2023. The worsening macroeconomic environment presents more headwinds to the expected growth.

“We cannot change the wind, but we can adjust our sails,” he said. “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 further said it is important to act swiftly, course correct, and right-size the investment levels to better align with this new reality. The company is moving to an office with significantly lower rent, and the co-founders and group leadership will take voluntary pay cuts.

Also Read: Carousell acquires Ox Street to double down on its re-commerce efforts in Greater SEA

Carousell needs to reorganise to focus on critical priorities and operate more efficiently to accelerate the path to profitability.

“We will learn from our mistakes, adjust and course correct quickly to make the biggest impact for our community. Moving forward, we will sharpen our priorities as a company, keep a watchful eye on costs and only invest in high-conviction initiatives that are correctly set up for success,” the Carousell CEO said.

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