Shopee joins ‘mass layoffs wave’ after free shipping ends in Brazil

THE marketplace Shopee, from Singapore, laid off about 50 employees this week, according to Estadão. The contingent is considered low compared to the company’s approximately 1,500 employees in Brazil. This same week, Ebanx also reported changes in the operation, which culminated in the dismissal of 20% of the staff. These are new examples of the difficulty that technology companies have been facing to expand business in the country.

Shopee’s layoffs were reported on the Layoffs Brasil website, which reports employee layoffs from startups and other large companies. The move comes after the company ended its unrestricted free shipping policy for consumers.

In early June, Shopee started to deliver the benefit only for purchases at official stores, which offer coupons for purchases over R$29, and with a delivery fee below R$20. When the products in question do not have the label , coupons for discount on delivery are only valid on purchases over BRL 59 (before, it was BRL 50). It also offers free shipping in seasonal campaigns; the next one will be on the site’s anniversary, on July 7, which will have around R$ 6 million in discount coupons.

According to the report, Shopee also dismissed about 100 temporary service providers who worked in a distribution center in Barueri. The workers were outsourced to the HR company GiGroup and did not have their contracts renewed.

Sought by Estadão, Shopee declined to comment on the case. O Canaltech also contacted the company, which responded with the following clarifications:

In just over two years in Brazil, the company already has more than 2 million registered Brazilian sellers, reinforcing its commitment to the development of local entrepreneurship, and more than 1,500 employees in the country. To support its expansion, Shopee opened, in April this year, its second office, which occupies four floors of a building in Largo da Batata.

The company’s headquarters are located at Av. Faria Lima, also in São Paulo, reinforcing its investment in the local economy and growth of the platform. Currently, Shopee has more than 100 vacancies, which strengthens different areas of the economy. The company, based in the city of São Paulo since 2019, emphasizes that it complies with all local legislation, including the payment of taxes. About employee movements are routine and periodic actions that are part of the business. Shopee maintains its strategy and commitment to Brazil.

Shopee faces problems in Brazil and left India this year (Image: Disclosure / Shopee)

The Shopee crisis in Brazil and worldwide

According to Estadão, free shipping for all Shopee purchases in Brazil helped expand the customer base, but proved unsustainable in practice. As a result of the end of the feature, many customers criticized the company on social media.

Shopee is also criticized for allegedly colluding with the sale of imported products without complying with all legal fees and requirements in the country. In addition to Asia, the Argentine Mercado Livre, the American Wish and the Chinese AliExpress and Shein were accused at the time. The companies denied the allegation.

Outside Brazil, the company also faced problems. With only a few months of operation in India, the Singaporean ended operations in the country in March. According to the company, it was due to the uncertainty of the global market. However, the press reported that she had poor growth prospects in the Indian market and was impacted by the gambling ban. Free Fireowned by its parent company, Sea Group.

Ebanx reduced around 20% of the staff of more than 1,700 employees (Image: Disclosure/Ebanx)

Ebanx layoffs

THE fintech Ebanx, a city of Paraná, informed on Tuesday (21) that it is reviewing its operation, with restructuring of structures, closing of projects and a reduction of around 20% in the staff of more than 1,700 employees.

“The decision was made based on the current scenario of the technology market as a whole, impacted in a profound and fast way by the macroeconomic environment. Ebanx remains committed to its sustainability and growth, following the mission of generating access between consumers and global companies “, the company told G1. O Canaltech also sought out the company and is awaiting a position.

Founded in 2012, Ebanx operates in 15 Latin American countries, such as Mexico, Colombia, Chile and Argentina. In 2019, it became a unicorn company (with a market cap of over US$ 1 billion) and in recent years it has maintained a plan to expand across the region. Its last contribution was US$ 430 million (R$ 2.2 billion) in a series B round, in June last year. In December, I had bought the fintech Online Remittance for R$ 1.2 billion.

Startup crisis progresses

Also according to the website LayOffs Brasil, the cuts announced by Brazilian and foreign startups have already surpassed 1,900 layoffs since March. Possible reasons are the global macroeconomic crisis and the increase in interest rates caused by the post-covid recovery and the war in Ukraine, which have alienated investors.

In June, Kavak, a Mexican used car sector valued at US$ 8.1 billion (R$ 41 billion) in 2021, has laid off Brazilian employees since March – Exame mentioned 150, and Estadão, 300.

Other recent examples were:

  • Fifth floor laying off around 160 employees in April;
  • Loft laid off 159 people in April after completing the integration with CrediHome;
  • Spanish Cabify announced end of operations in Brazil last year;
  • American Uber eats stopped working in Brazil in January of this year;
  • easily laid off more than 1,000 people after surpassing US$ 1 billion;
  • Bitso, a Mexican in the cryptocurrency market, laid off 80 people globally, including in Brazil;
  • Domestika, an American provider of online courses, laid off 200 around the world, with 40 cuts in Brazil;
  • Favo, a Peruvian online supermarket, ended its operations in Brazil in early June, laying off 171 people in the country;
  • Olist laid off approximately 150 employees at the end of May;
  • Grupo 2TM, owner of Mercado Bitcoin, laid off 90 of the approximately 750 employees.

Source: Estadão (via MSN), G1, Neofeed, Layoffs Brasil