Indonesia-based tech startup Gojek recently announced that it is laying off about 9% of its total workforce amid the coronavirus pandemic. The recent downsizing exercise at the company is expected to affect about 430 employees.
In an official statement, the company said that the layoffs are part of a “long-term response to the Covid-19 pandemic” to prioritize its core businesses of payments, transport, and food delivery.
The company also said that its on-demand cleaning and massage service, GoLife division will be closed by July 27 and its food festival concept, GoFood Festival will also be shut down.
In an internal memo to staff, company CEOs Andre Soelistyo and Kevin Aluwi said, “Focusing on our core services, shutting down verticals that are no longer viable during this period, and making bold bets on changing customer needs will ensure that we continue making a positive impact on the lives of millions of people while securing future growth.”
“Many” of the affected employees work for GoLife and GoFood Festivals, the company said. However, the company assured that this exercise will be the only Covid-19-related layoff.
Both Go-Life and GoFood Festivals saw a “significant downturn” due to the Covid-19 crisis. Its three core services aside, Gojek claims it’s seeing growth in logistics and groceries since the pandemic.
The changes were announced in a series of 16 internal town hall meetings attended by all employees. The estranged staff will be provided with benefits such as enhanced severance payments, health insurance scheme extensions, and outplacement support.
Earlier the company had announced a fundraise from Silicon Valley titans Facebook and Paypal in early June, while its video-streaming service GoPlay closed its first independent funding round “in the ballpark of $15mn.”
The recent downsizing exercise also follows the departure of its Chief Technology Officer, Ajey Gore, who quit the company after a five-year stint. Word about a Gojek layoff had floated earlier this year, but Soelistyo denied such news during the company’s March town hall.
Although the company is trying to save costs by shedding the extra workforce load, it has earlier confirmed buying a minor stake in local taxi company Bluebird in February. The deal was reportedly worth $30mn.
Later in April, Gojek also announced its acquisition of Indonesian point-of-sales startup Moka in a deal expected to be worth over $100mn. While this was publicly announced in the middle of the pandemic, these deals could have been sealed in the months prior.
Gojek is not the only Indonesian unicorn that has been impacted by the coronavirus pandemic. Last week, its rival Grab had also announced that it let go of 360 people – around 5% of its total headcount – as it prepares for a “long recovery period” post-pandemic.
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