Carsome, known as Malaysia’s first tech unicorn, is expecting to undertake layoffs. As mentioned by a source close to the matter, homegrown unicorns will undergo some severity especially in terms of downsizing their workforce.
The possibility of a workforce reduction across all of Carsome’s operations in the region has been making the rounds.
According to a Tech in Asia report, the used car company has apparently started letting people go in Thailand and Indonesia and is now focusing on Malaysia.
As a result of a share-swap deal that took place in July of last year, Carsome became the first tech unicorn in Malaysia.
Unlisted unicorns and so-called soonicorns, the next generation of billion-dollar businesses, face higher stakes for survival in other parts of the region because they have to stretch their cash out further.
The rumors were eventually confirmed by Southeast Asia’s largest integrated car e-commerce platform, which said that it is indeed undergoing an “optimization of workforce” and that its executive team will not receive pay for the remainder of 2022.
The tech unicorn, which has offices in Malaysia, Indonesia, Thailand, and Singapore, said in a statement to the media that it will focus on increasing business productivity by aligning resources with profits and enforcing stricter performance management.Carsome stated that all of this is a component of the employee base optimization.
According to the tech unicorn, a certain number of employees will inevitably be affected by Carsome’s strategy, but they will be compensated, “by receiving their full severance package and extended health benefits until the end of the year, together with support on their job search.”
The move appears to come after Carsome announced a group-wide accelerated profitability plan to achieve its goal of positive EBITDA within the next few quarters. “This plan includes accelerating its integration with the newly-acquired iCar and WapCar ecosystem of companies, as well as employee base optimization, and automation of processes to further increase group efficiency,” Carsome said in its statement.
However, a local media report indicates that Carsome, which raised US$290 million in series E funding at the start of this year, announced a few months ago the expansion of its regional headquarters in Malaysia, which at the time had over 560 employees.
In fact, Carsome stated in a statement to the media in August that the pandemic did not stop growing year over year; “Carsome’s business outside of Malaysia is expected to contribute up to 40% of group revenue by the end of 2022.” The company even shared that while the pandemic has affected nearly every industry imaginable, Carsome continued to expand footprints and launched its retail business in 2020.
“From the first Experience Center in Malaysia to more than 20 across the region, Carsome’s retail business now has become the fastest growing business for the company. In less than two years, it has successfully delivered more than 10 times growth year-on-year. Today, it’s already contributing to more than 25% of group revenue and is expected to contribute to about half of the group’s revenue in the mid-long term,” it added.
It would be safe to say that the current macroeconomic slowdown is affecting all tech companies, including unicorns and decacorns.
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