HONG KONG—Indonesian ride-hailing, e-commerce and financial-services company GoTo Group is laying off 12% of its employees, or 1,300 people, as it seeks to cut costs and chart a course through a difficult period for global technology companies, its chief executive told staffers.
The Jakarta-based company is seeking to give priority to core products and businesses and make its organizational structure more efficient, Chief Executive Andre Soelistyo said, adding that while savings had been made across the group’s operations, job cuts were necessary because of the uncertain market conditions created in large part by the pandemic.
“Unfortunately, it is also clear now that these uncertainties will linger for a while,” Mr. Soelistyo told employees Friday in an email viewed by The Wall Street Journal. “As a result of our organizational review, we have to part ways with some of you.”
Tech companies saw exceptional growth in both revenue and employee headcounts through the pandemic. But now, they’re cutting thousands of jobs. WSJ explains the macro — and micro — reasons for the industry’s massive layoffs.
The company, whose formal name is PT GoTo Gojek Tokopedia GOTO 3.74%
Tbk, operates Gojek, an app connecting motorcycle taxis and cars with passengers in places such as greater Jakarta, a densely populated metropolitan area of about 30 million people. Gojek last year combined with Tokopedia, a popular online marketplace, to form GoTo Group. As of June 30, the company said it had 9,630 permanent employees.
Global tech companies that were flush with funds and enjoyed strong growth at the height of the Covid-19 pandemic have had to cut head counts in the face of high inflation, rising interest rates and a stronger dollar—as well as after hiring too many workers in recent years. Southeast Asia’s tech giants haven’t been spared.
GoTo—whose April initial public offering on the Indonesia Stock Exchange raised about $1 billion—is notifying affected employees Friday, said a company spokesperson, who declined to comment on where the cuts would be felt most within the group. Those laid off will receive at least one additional month’s salary on top of their statutory payout, as well as psychological, financial and career counseling until the end of May, the spokesperson said.
Sea Ltd.
, a Singapore-based e-commerce, videogaming and digital-finance company, has cut about 10% of its workforce in the past six months, according to people familiar with the matter. The New York-listed company had about 67,300 employees at the end of 2021, according to its annual filing with the US Securities and Exchange Commission.
Sea’s recent job cuts were mostly related to market exits, reassessment of priorities for its business initiatives and adjusting the size of different functions and teams, Chief Corporate Officer Yanjun Wang said on an earnings call this week. The company this year said its Shopee e-commerce platform was closing operations in India.
Grab Holdings Ltd.
, the ride-hailing and delivery company that went public in New York through a blank-check merger in December 2021, also plans to reduce its regional head count, finance chief Peter Oey said on an earnings call this week, without specifying details about the size of planned cuts. mr. Oey said the company has slowed down the pace of hiring, streamlined certain functions and chosen not to fill some positions made vacant by natural attrition. Grab had 8,834 full-time employees as of the end of 2021, according to a regulatory filing.
GoTo said in its prospectus that it plans to list on an overseas exchange by the end of 2023 depending on market conditions, with New York among the options being considered. Its shares, which have fallen 34% from their IPO price, closed 3.7% higher in Jakarta on Friday.
In October, GoTo said it was exploring a coordinated secondary offering with pre-IPO backers after the lockup period for the shares they hold expires at the end of November. The company counts SoftBank Group Corp.
Alibaba Group Holding Ltd.
Alphabet Inc.’s
Google and Tencent Holdings Ltd.
as its backers. SoftBank recently sold some of its stake in the parent of Paytm, an Indian mobile-payments giant.
GoTo is due to report third-quarter results Monday. The company in August reported a first-half loss of 14.17 trillion Indonesian rupiah—equivalent to $904.7 million—on net revenue that rose 73% to 3.4 trillion rupiah. The loss was wider than the 6.62 trillion rupiah from the corresponding period last year.
Write to Dave Sebastian at [email protected]
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