Noon, the e-commerce company dubbed as the Middle East’s counterpart to Amazon, has trimmed approximately 10% of its 3,400-strong workforce as part of its cost-cutting measures and to improve efficiency, said its founder Mohamed Alabbar. The job cuts covered positions in advertising and marketing, as well as other departments, as confirmed by Alabbar in an interview.
According to Mohamed Alabbar, founder of Noon, the company has been reducing costs and cutting staff for the past 18 months. Alabbar, who owns 50% of the Dubai-based e-commerce firm, revealed that the layoffs included roles in marketing and advertising, among other departments. He added that Noon started the process before major tech companies did but has now completed it. The other 50% of Noon is owned by Saudi Arabia’s sovereign wealth fund.
During the pandemic, some of the largest tech companies in the world went on a hiring spree, but have now announced the largest rounds of layoffs in their history. Amazon, Alphabet Inc., Microsoft Corp., and Meta Platforms Inc. have all cut their headcount to improve performance and reduce costs. Since the beginning of the year, over 67,000 jobs have been eliminated across the industry, according to Bloomberg’s data as of early February.
Despite the economic downturn caused by the pandemic, some technology companies in the Middle East have managed to raise funds from investors. However, Softbank Group Corp.-backed startup Kitopi cut nearly 2% of its workforce in late 2022. Some companies, including Kitopi and Noon, are viewed by bankers as potential long-term candidates for IPOs, as the IPO market remains strong. However, Noon’s founder, Mohamed Alabbar, who is also the founder of Emaar Properties PJSC, the developer of the world’s tallest skyscraper, said that there are no current plans to sell shares in Noon.
Back in 2016, Noon was established with a funding of $1 billion from investors including the Public Investment Fund, to capture a significant portion of the Gulf’s e-commerce market. The company had been on an expansion spree to expand its presence in other Middle Eastern countries. In 2021, Noon planned to receive a $2 billion investment from investors such as the PIF to modernize its infrastructure to accelerate deliveries. However, according to Alabbar, the company’s improved cash burn rate and margins may render the $2 billion investment unnecessary. Noon operates in Saudi Arabia, Egypt, and the United Arab Emirates and had plans to expand to other regions in the Middle East.