Zalando’s trimming down and limbering up in order to adjust to the start and stop of the e-commerce world.
The German company said it would remove “several hundred overhead roles” from its workforce of about 17,000. The cuts come in corporate functions and not in the staffing of “frontline” roles in logistics centers, customer care and outlet stores or in Zalando Studios.
Co-chief executive officers Robert Gentz and David Schneider, who cofounded the e-commerce giant in 2008, delivered the news to employees themselves.
“Over the last few years, some parts of our company have expanded too much and we have added a degree of complexity to our organization that impacted our ability to act fast,” Gentz and Schneider said in a message to employees noting the company has already slowed hiring and sought to simplify operations.
“Yet, going into 2023 we acknowledge that we are not where we need to be and as a result, we must take even more decisive action,” the co-CEOs said.
“This decision does not represent a failure of people, roles or us as a company,” they said. “It means that some parts of our company need to be shaped differently than the setup that made us successful in the past. As founders and co-CEOs, this is on us.”
Zalando — like other e-commerce companies and many fashion players as well — grew quickly during the pandemic and has since seen those tailwinds subside as life returned to something closer to normal and inflation hit the economy.
Gentz and Schneider said the slowdown revealed “the increased complexity of our company and our speed to react.”
“Instead of a big company with a big company structure and mindset, we need to be a big company with a small company structure and mindset,” they said, noting the full scope of the cuts were still being determined. They did note, though, that the “senior leadership level” would be impacted.
Zalando isn’t the only e-commerce company to find itself leaning too far forward when the market shifted.
Amazon started laying off 18,000 workers in January and Shopify, which powers the back end of brands’ e-commerce operations, laid off 10 percent of its workers last summer. Traditional retailers have also been cutting back, from Neiman Marcus Group to Kohl’s Corp.
Shares of Zalando slipped 1.9 percent to 39.11 euros on Tuesday.