Japan's largest online retailer Rakuten is closing its Singapore website after two years, and trimming its staff.

On Friday, the fifth day of Chinese New Year, about 30 local employees were given the pink slip .

While the company will continue to keep its regional HQ here, a notice on the website posted on Friday evening said no new purchases can be made from its online portal from next month.

Earlier that afternoon, around 30 staff at its Market Street office at Raffles Place were told that they would be laid off. They included sales, marketing and customer service staff who were directly involved in running the website.

They were among the 150 employees who were laid off in Singapore, Malaysia and Indonesia. The company is closing its websites in the other two countries as well.

Most of the Singapore staff were told to immediately return their staff passes, and their e-mail accounts were deactivated on the spot. They were escorted out of the office and told that they did not need to turn up for work any more, said a source.

"All were in shock," the source said. "They were told that Friday was their last day (of work)."

A handful can continue to work until the end of the month, when the website finally goes offline.

The Sunday Times understands that the individual severance packages are tied to how long the staff have worked there. The company will make the payouts only next month.

When contacted yesterday, a Rakuten spokesman in Japan declined to give details of the Singapore retrenchments, but he said that the firm will compensate workers "above and beyond legal requirements" and help them find jobs.

Rakuten Group, which is listed on the Tokyo Stock Exchange, announced in Japan on Friday a five-year business plan that includes overhauling its business model in South-east Asia by closing down its online retail websites and starting a customer-to-customer trading application.

Experts were surprised that the retrenchments were carried out over the Chinese New Year celebrations that span 15 days.

"We usually tell unionised companies to avoid retrenchments during festive seasons. This is good industrial relations practice," said labour MP Patrick Tay, who chairs the Government Parliamentary Committee for Manpower.

The firm is not unionised but the affected professionals, managers and executives can turn to the National Trades Union Congress (NTUC) for job placement help, said Mr Tay, who is NTUC's assistant secretary-general.

"The timing is a little brutal," said Singapore Human Resources Institute president Erman Tan, adding that the speed at which retrenched staff were shown the door within hours was "very fast".

"This reflects the culture of the e-commerce sector. Things move very fast online and perhaps retrenchments too," said Mr Tan.

Association of Small and Medium Enterprises president Kurt Wee said the retrenchments signal the start of a phase of consolidation by companies as they respond to the global slowdown and local economic conditions.

"When companies consolidate, some staff retrenchments are inevitable," said Mr Wee.