OLX has laid off 800 jobs and plans to lay off 700 more. The Netherlands-headquartered company, which started its global operations in over 30 plus countries, with over 10,000 employees across five continents, has previously hinted that it would layoff 1500 workers in a report earlier this year. Most of the layoffs were in its auto business.
“Earlier this year, we made the strategic decision to exit the OlX Autos business, and potential buyers or investors have been explored since then,” the company said in a statement confirming the layoffs to TechCrunch.
According to report, the layoffs are not restricted to a particular market or division, and affected employees have been informed of the decision.
As a result of this process, it became clear that pursuing individual country sales was the best option, given the significant value that exists within local markets. This includes Chile, the financing business in Latin America, and both the Olx classifieds platforms and the Autos transaction businesses in India, Indonesia and Turkey.”OLX
The company has shut down its operations in Argentina, Mexico and Colombia because it couldn’t find potential buyers or investors in those markets.
Recall that the company exited Nigeria, Kenya and Ghana due to its inability to make profit in the face of stiff competition. As such it needed to re-strategise and focus its resources in more viable markets. OLX was the dominant player in the Nigerian market until intense competition from Jiji.ng emerged.
Is shift in focus and strategy going well for OLX?
Starting off quite brillantly, soon enough OLX became a marketplace for fraudsters. These include sellers who post fake advertisements to dupe buyers upon receiving advance payment, and fraudulent buyers who engage in UPI scam, phishing, and sending fake SMSes and emails of payment confirmation.
In 2018, the company announced that it rejects nearly 25% of the advertisements at the initial stage. It also stated that it would work with law enforcement agencies to curb fraudulent activities on the platform. Despite these claims, fraudulent adverts continued to surface on the platform including advertisements to sell properties of public interest, such as the Statue of Unity, and a former Indian Air Force fighter jet.
In India, about 99% of its listings come from used mobile and electronic gadgets, used home and household goods, and used cars & bikes. In December 2020, the company launched OLX Autos in India. However, OLX’s operations in India, like other online retailers, faced tremendous problems with fraud and with people selling stolen vehicles and other items.
In order to safeguard users from fraud, roughly 25% of car listings are rejected by its systems.
In 2021, the incumbent CEO was replaced by Romain Voog, a former Amazon and Airbnb veteran who took over to continue the company’s expansion by helping in the development of OLX Autos.
Following Russia’s invasion of Ukraine in February 2022, numerous multinationals, primarily Western corporations withdrew from the country. Unlike most of its Western competitors, OLX has been sluggish to announce any disinvestments or reductions in its activities in Russia, which has drew criticism.
In view of shifting macroeconomic conditions, it is safe to assume that OLX is taking the required steps to cut its cost structure. The firm apologized to part ways with their valuable contributors, but that doing so is necessary to meet its future ambitions.
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