GoTo retrenching 1,300 people— 12% of Indonesia tech giant’s headcount

Indonesian tech giant GoTo Group announced Friday that it is laying off 1,300 people, or around 12% of its total headcount.

GoTo is the merged entity of ride-hailing company Gojek and online marketplace Tokopedia.

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The company announced Friday that “a reduction in staffing levels that will sadly affect 1,300 people or approximately 12% of employees, across the GoTo group.”

Previous reports by local and foreign media said that GoTo, which went public on the Indonesia Stock Exchange in April 2022, was planning to cut 10% of its total workforce amid economic headwinds.

“Considering the challenging global macroeconomic conditions which have a significant impact on businesses around the world, the company, like other prudent companies, is making adjustments to ensure it can navigate the uncertain road that lies ahead,” the statement said.

GoTo said it must “accelerate its progress towards becoming a truly sustainable and financially independent business, centered on its core offerings of on-demand, e-commerce and financial technology services.”

In their respective quarterly earnings announcements this week, Sea Limited cited macro uncertainties such as rising interest rates and global inflation rates impacting its business and Grab said it is monitoring macro uncertainties and has initiated cost reductions.

GoTo’s retrenchment exercise follows local media reports of Sea Limited laying off more than 7,000 employees, or around 10% of its workforce, over the past six months.

GoTo joins other companies based in Southeast Asia that laid off workers this year.

They include Foodpanda, Carsome and Propzy, which confirmed with media outlets that they retrenched some workers this year. Propzy said it let go of as much as 50% of its employees.

“By the end of the second quarter, approximately 800 billion [Indonesian rupiah] in structural cost savings had been achieved in areas such as technology, marketing and outsourcing,” the company said. That’s equivalent to about $50.9 billion.

“However, to further navigate in the midst of increasingly challenging global economic conditions, the company must focus on matters that are under the control of the company.”

The retrenchment plan will not be detrimental to the business continuity of the firm, and “constitutes a strategic effort to ensure it can continue to make a positive impact for millions of consumers, driver-partners and merchants within the GoTo ecosystem through a healthy and sustainable growth,” it said.

GoTo’s shares were trading at IDR 220 a piece, up 2.8% on Friday. The stock has plummeted 42.4% year-to-date.

GoTo is set to announce its third-quarter 2022 earnings on Monday.