Indonesia GoTo joins global tech cuts in slashing 1,300 jobs

JAKARTA – Indonesia’s largest tech firm GoTo Group will cut 1,300 jobs, about 12 per cent of the workforce, as it seeks to curtail expenses and assuage investor concerns over mounting losses.

The ride-hailing, e-commerce and fintech company will begin notifying affected employees right away.

Formed through a merger of ride-hailing provider Gojek and e-commerce firm Tokopedia, the company went public in April with a US$1.1 billion (S$1.5 billion) stock sale, one of the year’s biggest initial public offerings IPOs). Its shares have lost almost 40 per cent since as investor sentiment on the tech sector sours amid soaring inflation and interest rates.

“Challenging global macroeconomic conditions are having a significant impact on businesses around the world and GoTo, like other prudent companies, is making adjustments to ensure it can navigate the uncertain road that lies ahead,” GoTo said in a statement on Friday.

GoTo said it has achieved around 800 billion rupiah (S$70 million) in cost savings in the first half of this year through efficiency measures in technology, marketing and outsourcing.

“However, the company has determined that further measures must be taken to ensure it is equipped to navigate the challenges ahead,” it said about the job cuts.

GoTo joins tech giants from Apple to Meta Plaform to Shopee’s Sea in laying off staff or slowing hiring as companies curtail ambitions and brace for tough times ahead. Job cuts in the industry are nearing levels seen in the early stages of the Covid-19 pandemic, as tech companies across the globe confront the effects of a deteriorating economic climate and a heightened investor focus on profitability.

Sea., South-east ’s largest tech company, cut about 7,000 jobs in the past six months, according to a person familiar with the matter.

Shares in GoTo rose 2.8 per cent on Friday after announcing the job cuts.

The job cuts underscore an effort to trim operating expenses as the company prepares to unveil quarterly results on Nov 21. In August, it reported its second-quarter adjusted loss before interest, taxes, depreciation and amortization widened to 4.14 trillion rupiah (S$363 million) from a pro-forma loss of 3.9 trillion rupiah a year earlier.

The company 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.”

GoTo and its publicly traded peers Sea and Grab Holdings – all of which are loss-making – have seen valuations drop as they navigate an economic slowdown, rising interest rates and accelerating inflation. GoTo executives have said they are trying to balance spending on growth with its effort to reach profitability.

The company, backed by SoftBank Group, Alibaba Group and Singapore sovereign wealth fund GIC, is exploring a coordinated secondary offering of shares held by pre-IPO shareholders after a lock-up period ends on Nov 30.

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