One of the leading online shopping platforms, Noon, which is often called the Middle East’s version of Amazon, has laid off around 10%, or 340, of its total workforce of 3,400, as reported by Bloomberg.
According to its Founder, Mohamed Alabbar, an Emirati businessman, the move is aimed at boosting efficiency and cutting costs. The laid-off employees belong to several departments, including marketing and advertising.
Alabbar stated that the company has been reducing expenses and laying off employees for the last 18 months. Half of Noon’s shares are owned by him, and the other half is held by Saudi Arabia’s sovereign wealth fund, Public Investment Fund (PIF).
Alabbar also claimed that they began cost-cutting way before larger tech companies did, and added that they have now completed the process.
In 2016, Noon was established with Alabbar raising $1 billion from investors, including PIF to launch the e-commerce company. Noon had been pursuing an expansion strategy to capture a bigger market share of the e-commerce industry in the Gulf region.
Earlier in 2021, Alabbar stated that the PIF and other investors were planning to invest $2 billion in Noon in order to enhance its infrastructure and speed up delivery times.
However, Alabbar, this week, mentioned that Noon’s financial situation has improved, with lower cash burn rates and better margins, leading the company to reconsider whether they still require the $2 billion investment.