Written By The e-commerce industry has seen a lot of changes in recent years, and Amazon has emerged as the clear leader in the market. However, there are still a few players trying to challenge Amazon’s dominance. One such player is Noon, an online retailer that operates in the Middle East. But it seems like Noon is facing some tough times as it recently announced plans to cut 10% of its workforce to reduce costs and stay competitive.
Noon was launched in 2017 with the backing of Saudi Arabia’s Public Investment Fund and Emirati businessman Mohamed Alabbar. It aimed to become the largest online marketplace in the Middle East, offering products ranging from electronics to groceries. The company was well-funded and had big plans for growth, but it faced tough competition from Amazon, which entered the Middle East market in 2019.
The COVID-19 pandemic further complicated things for Noon as it disrupted supply chains and caused economic uncertainty. Despite the challenges, Noon managed to expand its operations to Egypt, and it had plans to enter the Saudi Arabian market.
However, Noon’s growth plans seem to have hit a roadblock as the company announced that it would be laying off around 10% of its workforce. The move is aimed at reducing costs and streamlining operations to stay competitive against Amazon.
In a statement, Noon said, “We have made the difficult decision to reduce our workforce by around 10% in certain areas of the business. This is part of our ongoing efforts to focus on efficiency, streamline operations, and position the company for long-term growth.”
The company did not provide any details about which departments or job roles would be affected by the layoffs.
The news of Noon’s layoffs comes at a time when Amazon is rapidly expanding its presence in the Middle East. The company recently announced that it would be opening its first fulfillment center in the United Arab Emirates, which would enable it to offer faster delivery to customers in the region.
Noon will have to work hard to stay competitive against Amazon, and cutting costs may be one way to achieve that. However, it remains to be seen whether layoffs alone will be enough to help Noon stay afloat in the fiercely competitive e-commerce market.
Some analysts believe that Noon’s decision to cut jobs may have been driven by the company’s struggle to achieve profitability. Despite its big plans for growth, Noon has yet to turn a profit, and the COVID-19 pandemic has only made things more challenging.
In a recent interview with Arab News, Noon CEO Faraz Khalid said that the company was focused on achieving profitability, but he did not provide a timeline for when that might happen.
“We have made significant progress in our journey towards profitability, but it is an ongoing process,” Khalid said. “We are taking a disciplined approach to growth and remain focused on delivering the best possible customer experience.”
Noon’s decision to cut jobs may not be popular among its employees, but it is a sign that the company is taking steps to stay competitive in the tough e-commerce market. Whether these measures will be enough to help Noon achieve long-term success remains to be seen.
