Taipei, Taiwan — ETMall, one of Taiwan’s leading multichannel retailers, announced on Monday that it will reduce its workforce by 200 employees by the end of this year. The company’s parent, Eastern Media Group, stated that the decision comes as a result of rising operational costs, including soaring electricity bills, increases in Taiwan’s minimum wage, and higher interest payments, which have collectively led to an additional NT$130 million (US$3.98 million) in expenses.
ETMall’s Financial Struggles and Workforce Reduction
ETMall has been grappling with significant financial challenges, including a sharp decline in sales across its online shopping platform and TV shopping division. According to Eastern Media Group, the company’s e-commerce platform saw sales plummet by NT$5.9 billion from 2021 to 2024 — a staggering 58 percent decrease. Additionally, revenues for ETMall’s TV shopping division fell by 20 percent, dropping to NT$6.5 billion during the same period.
Despite these setbacks, Eastern Media Group emphasized that the company remains profitable, although it has faced difficulties managing both its online and offline retail operations. ETMall’s offline retail division, in particular, has posted consistent losses since its launch in 2023. However, Eastern Media pointed out that its shopping mall at Taipei Main Station had shown strong growth, with sales increasing by 345 percent from October 2023 to October 2024.
Key Points of ETMall’s Downsizing:
| Key Issue | Impact |
|---|---|
| Workforce Reduction | 200 employees to be laid off by the end of 2024 |
| Declining Online Sales | 58% drop in sales (NT$5.9 billion loss) from 2021-2024 |
| TV Shopping Division Struggles | 20% decline in revenue, down to NT$6.5 billion |
| Offline Retail Losses | Continued losses since 2023, despite some success at Taipei Main Station |
| Shutting Down Loss-Incuring Units | Closure of the fresh food online shopping network and Ponta rewards program |
| Support for Laid-Off Employees | Voluntary severance packages offered, assistance with finding new positions |
ETMall’s Strategic Changes and Future Plans
In response to these challenges, ETMall will also be closing its loss-making fresh food online shopping network and discontinuing its Ponta points-based rewards program. These changes are part of a broader strategy to reduce operational costs and streamline its business operations.
One of the more significant issues facing ETMall’s TV shopping division is the ongoing decline in cable TV subscribers. According to Eastern Media, Taiwan’s cable TV subscriber base has fallen from a peak of 5.2 million households to less than 4.4 million. This reduction in subscribers has put additional pressure on ETMall’s TV shopping services, which rely heavily on television broadcasting for sales.
Despite these cuts and operational adjustments, Eastern Media confirmed that the company’s overall performance remains positive, and ETMall’s top-performing employees will receive a 5 percent pay raise after the Lunar New Year holiday in 2025.
Impact on ETMall’s Employees
ETMall has reportedly notified the Labor Affairs Department of its workforce reduction plans, and many of the affected employees have already accepted voluntary severance packages. According to Lu Chih-ming, a specialist from the New Taipei Labor Affairs Department, the company is making efforts to ensure that those who leave are provided with opportunities for reemployment within the company.
The downsizing comes at a time when Taiwan’s economy is navigating various challenges, and many companies are forced to adjust their operations to remain competitive. ETMall’s focus on improving its profitability amid growing operational costs reflects the tough market conditions facing many Taiwanese businesses today.
FAQs: Understanding ETMall’s Downsizing and Financial Changes
1. Why is ETMall laying off 200 employees?
ETMall is cutting 200 jobs due to rising operating costs, including higher electricity bills, increased minimum wage rates in Taiwan, and additional interest payments. This decision follows a significant drop in sales across both its online and TV shopping divisions.
2. What areas of ETMall’s business are struggling?
ETMall’s online shopping platform has seen a 58% drop in sales, while its TV shopping division experienced a 20% revenue decline. Additionally, the company’s offline retail operations have posted continuous losses since 2023.
3. What changes are ETMall making to address its financial issues?
ETMall will close its fresh food online shopping network and discontinue the Ponta points-based rewards program. The company is also making efforts to reduce its workforce and streamline its operations.
4. How is ETMall supporting its employees during this downsizing?
ETMall is offering voluntary severance packages to affected employees, and it is helping them find new roles within the company. The company also plans to give a 5% pay raise to its best-performing employees after the upcoming Lunar New Year holiday.
5. What impact is the decline in cable TV subscribers having on ETMall?
ETMall’s TV shopping channels are under pressure due to a decrease in cable TV subscribers in Taiwan, which has affected viewership and sales. This decline has compounded the company’s financial difficulties in recent years.
Conclusion
ETMall’s decision to reduce its workforce is a reflection of the ongoing struggles faced by the company in the face of rising operational costs and declining sales. While ETMall is taking steps to address its challenges, including closing underperforming divisions and adjusting its workforce, the future remains uncertain as the company navigates a changing retail landscape in Taiwan.
