SINGAPORE – Online fast-fashion retailer Shein has downsized the team in its Singapore headquarters just as the company prepares to make its debut on the London Stock Exchange.

More than two dozen staff members were said to have been retrenched on Wednesday.

The layoffs were reportedly part of an ongoing strategy to “drive efficiency” in Shein’s global IT research and development operations, a company representative told the South China Morning Post.

“As Shein continues to grow its operations in Singapore with a newly expanded office to accommodate its increasing workforce, the company has also restructured the Singapore arm of its IT research and development team, relocating some positions to other markets as part of its ongoing strategy for continued global expansion, localisation and to drive efficiency,” the company said.

“We are committed to working with the affected employees throughout this transition period, providing necessary support and assistance, as well as the opportunity to apply for alternative roles to support localisation efforts in other markets.”

Despite the job cuts this week, Shein said plans to grow its Singapore operations are still underway, with the retailer “hiring for multiple open roles”.

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Global expansion plans

Shein rose to fame as an e-commerce platform introducing low-cost China-made apparel and accessories to customers worldwide. The company is able to slash its prices by sourcing items directly from some 6,000 clothing manufacturers and branding them under the Shein label.

With nearly 89 million active shoppers globally, the retailer raked in US$32.5 billion in sales in 2023 alone, a 43% increase from the previous year.

In 2022, Shein moved its headquarters from China to Singapore and is poised to list in London this year. However, it continues to manage its supply chain from China.

Chris Xu, founder and CEO of Shein, has also become a permanent resident of Singapore. The decision is believed to be part of the company’s concerted efforts to expand globally and evade China’s regulatory scrutiny of Chinese-owned businesses going public overseas.

Recent reports, however, suggest that Shein is struggling with its initial public offering. The retailer was initially set to go public in New York but faced resistance from US lawmakers.

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Poor treatment of workers

The London IPO plans could suffer a similar fate considering how investors are reportedly growing impatient with the retailer and the increasing uncertainty around the fundraising.

However, much of the criticism directed at Shein is primarily about the poor treatment of its factory workers and the deplorable conditions seen across its supply chain.

A documentary by Channel 4 in the UK found some workers were forced to work 75-hour shifts and rarely given time to rest.

Meanwhile, the watchdog Public Eye discovered a number of Chinese and European manufacturers within Shein’s network were violating labour laws and running informal factories in residential areas.