AliExpress Russia reportedly cut off employee due to risks of new sanctions

May 13, 2022 9:25 am

AliExpress Russia, the e-commerce joint venture between Alibaba Group Holding and three Russian partners, is reportedly to start a wave of lay-offs, as Chinese tech companies scale back their operations in the country in order to reduce exposure to the risks of sanction.

The job cuts, which was first reported by Vedomosti, affect up to 40 percent of employees working on business lines that have become vulnerable amid Western sanctions on Russia.

In an interview with Vedomosti, Deng Jinling, a Chinese merchant who lives in the eastern export hub of Yiwu, said she hasn’t received any orders from Russia and Ukraine in recent months.

The markets used to contribute around 60 per cent of her vacuum flask business, with an annual turnover of around 20 million yuan, she added.

“We should negotiate prices with clients after Lunar New Year, and deliver orders by May. But we haven’t received any order as of today,” Deng said.

AliExpress Russia was formed in 2019 after AliExpress inked a joint venture deal with Russian internet giant, Megaton. AliExpress Russia expanded rapidly since then, the company chief executive Dmitry Sergeev underscored that AliExpress Russia wanted to increase the share of Russian sellers on the platform to 50% by 2022-2023. He also said the firm aimed for 50 million customers a year.

In addition, Dmitry Sergeev publicly shared the company’s ambitious goal of going public in the next few years. But the plan could be delayed indefinitely amid huge uncertainties of business environment in the country.

Besides, China’s telecom equipment giant Huawei Technologies Co., has also reportedly laid off employees in Russia to manage the risks of the sanctions.

DJI, China’s top drone maker, announced last month it would suspend business in Russia and Ukraine to ensure its products are not used in combat.