The GoTo logo can be seen displayed on the smartphone screen and in the background.
Raphael Henrique | Sopa Image | Light rocket | Getty’s image
Indonesian technology giant GoTo Group announced on Friday that it was laying off 1,300 people, or about 12% of its total workforce.
GoTo is a joint entity of the ride-hailing company Gojek and the online marketplace Tokopedia.
related investment news
The company announced Friday that it’s “staffing reductions will unfortunately affect 1,300 people or approximately 12% of employees, across the GoTo group.”
Previous reports by local and foreign media stated that GoTo, which went public on the Indonesia Stock Exchange in April 2022, plans to cut 10% of its total workforce amid economic challenges.
“Given the challenging global macroeconomic conditions that are having a significant impact on businesses around the world, the company, like any prudent company, is making adjustments to ensure it can navigate the uncertain path that lies ahead,” the statement said.
GoTo said it must “accelerate its progress toward becoming a truly sustainable and financially independent business, centered on its core offerings of on-demand services, e-commerce, and financial technology.”
In its 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 was monitoring macro uncertainties and had initiated cost reductions.
The GoTo savings exercise follows local media reports about Sea Limited laying off more than 7,000 employees, or about 10% of its workforce, over the last six months.
GoTo joins other companies based in Southeast Asia making layoffs this year.
They include Foodpanda, Carsome and Propzy, who confirmed to the media that they were laying off some workers this year. Propzy said it would let go of as much as 50% of its employees.
“At the end of the second quarter, it was about 800 billion [Indonesian rupiah] in structural cost savings have been achieved in areas such as technology, marketing and outsourcing,” the company said. That equates to about $50.9 billion.
“However, to better navigate amid increasingly challenging global economic conditions, the company must focus on matters that are under the company’s control.”
The savings plan will not be detrimental to the company’s business continuity, and “is a strategic endeavor to ensure it can continue to positively impact millions of consumers, driver partners, and merchants within the GoTo ecosystem through healthy and sustainable growth,” he said.
GoTo shares are trading at Rp 220 per share, up 2.8% on Friday. The stock has plunged 42.4% year-to-date.
GoTo will announce its third quarter 2022 earnings on Monday.