As a cost-cutting measure, Noon cuts 10% of its jobs in the Middle East

In order to enhance the efficiency and reduce costs of Noon, the Middle East's answer to Amazon.com Inc., the company's founder Mohamed Alabbar has cut about 10% of the company's roughly 3400 employees. 

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According to Alabbar, those who have been laid off at the Dubai-based e-commerce firm include employees from marketing and advertising departments as well as others, who work in other departments as well.  

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Alabbar, who owns 50% of Noon and Saudi Arabia's sovereign wealth fund owns the remaining 50%, said the company was cutting costs and reducing staff for the past year and a half. “We are now at the end of our cost cutting process,” he told Diary of a Digital Nomad. 

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As a result of a hiring spree during the pandemic that left many of the world's largest tech companies with too many workers, some of them have announced the largest round of layoffs in their history. Several companies, including Amazon, Alphabet Inc., Microsoft Corporation, and Meta Platforms Inc., have also cut headcounts as a means of reducing costs and improving performance. Data compiled by Trade Algo shows that over 67,000 jobs have already been eliminated within the industry since the beginning of the year.

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Achieving success in the face of economic downturn

Late last year, Softbank Group Corp.-backed Middle East startup Kitopi cut almost 2% of its workforce despite attempting to raise capital from investors despite the global downturn, although local tech companies managed to raise funds despite the slowdown. 

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It is expected that some of the companies, including Noon and Kitopi, will continue to do well during the next few years, which means some of them are seen as potential candidates for future IPOs. It is important to note, however, that Alabbar — who founded Emaar Properties PJSC, the world's tallest skyscraper — does not have any plans to sell shares of Noon at the moment. 

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In 2016, Noon was created by Alabbar, a company which had been on an expansion drive for some time as they sought to capture a bigger slice of the Gulf e-commerce market. In 2016, Alabbar raised $1 billion from investors including the Public Investment Fund and the firm was launched.

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As far as Alabbar is concerned, in 2021, the PIF will inject $2 billion into Noon in order to improve the company's infrastructure. In his comments to the media this week, he stated that the company has drastically reduced its cash burn rate, and that its margins are improving, so that they may not need to obtain $2 billion in order to proceed with growth. 

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In order to expand its business in other nations across the Middle East, Noon was looking to expand into the United Arab Emirates, Saudi Arabia and Egypt.