Noon, the Middle East’s answer to Amazon.com Inc., cut about 10% of its workforce to increase efficiency and reduce costs, according to its founder Mohamed Alabbar and published by Bloomberg.
The layoffs at the Dubai-based e-commerce firm included roles in marketing and advertising, as well as in other departments, Alabbar said in an interview.
“We’ve been cutting costs and reducing staff for the past year and a half,” said Alabbar, who owns 50% of Noon, while Saudi Arabia’s sovereign wealth fund owns the other half. “We started before the big tech companies did but we’re done now.”
Some of the world’s biggest tech companies have announced the largest rounds of layoffs in their history after a hiring spree during the pandemic left them with too many people. Amazon, Alphabet Inc., Microsoft Corp. and Meta Platforms Inc. have all reduced headcount to cut costs and improve performance. As of early February, more than 67,000 jobs had been eliminated across the industry since the beginning of the year, according to data compiled by Bloomberg.
In the Middle East, Softbank Group Corp.-backed startup Kitopi cut almost 2% of its workforce late last year, although some tech companies have managed to defy the global slowdown to raise funds from investors.
As initial public offerings remain strong, some companies, including Noon and Kitopi, are viewed by bankers as long-term candidates for potential IPOs. However, Alabbar — the founder of Emaar Properties PJSC which built the world’s tallest skyscraper — said there are no current plans to sell shares in Noon.
Noon was created in 2016, with Alabbar raising $1 billion from backers including the Public Investment Fund to set up the firm. The company had been on an expansion drive as it sought to capture a larger slice of the Gulf e-commerce market.
In 2021, Alabbar said investors including the PIF were set to inject $2 billion to help Noon upgrade its infrastructure to speed up deliveries. Speaking this week, he said the company’s “cash burn rate has gone down drastically and our margins are getting better” so it “may not need to get that $2 billion.”
Noon operates in the United Arab Emirates, Saudi Arabia, and Egypt and was looking to expand in other nations across the Middle East.
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Last Updated on May 1, 2023 by Safiya K
