In recent times, similar to Singapore, Indonesia has witnessed a series of unfortunate events where several prominent companies have been forced to make difficult decisions, resulting in significant employee layoffs. These instances of downsizing have left many baffled and concerned about the state of the job market in the country.
In this blog post, we delve into the heart of the matter, shedding light on the underlying reasons behind the layoffs that have made headlines across Indonesia. By examining each company's situation, we hope to gain valuable insights into the challenges they faced and the factors that led them to take such drastic measures.
Our aim is to present this information in an accessible and straightforward manner, devoid of overly complicated jargon. Understanding the reasons behind these layoffs is crucial not only for those directly affected but also for the broader business community and policymakers alike. So, let's navigate through the complexities and discover the real causes behind the recent wave of layoffs in Indonesia.
Disclaimer: Companies included in this article are only based on media-reported layoffs.
Ayoconnect is a full-stack payment API solution for businesses, with main offerings including direct debit, virtual cards, instant transfers, and digital products.
The fintech company Ayoconnect has laid off 10% of its employees in Indonesia. The decision was made as part of an effort to pursue "profitable and self-sustaining business lines" and align the company's objectives for 2023 with a transition to a leaner organizational structure.
The reduction in the number of employees is part of the company's strategy to optimize operations and focus on core businesses that are more profitable and aligned with market needs.
The layoffs have affected approximately 20 employees out of the total of around 200 employees at Ayoconnect.
The company is providing severance pay, continued health insurance coverage for six months for the entire family of the affected employees, and an outplacement program to assist them in finding new jobs.
Qoala is an omnichannel insure-tech company that aims to make insurance universally accessible and easy to use. Qoala partners with several retailers and insurance companies to offer more innovative microinsurance products.
Insurtech startup Qoala conducted layoffs of 80 employees in Indonesia and Malaysia on July 31, 2023. This decision was made to enhance the company's synergy across departments and business units in order to achieve a more efficient and sustainable business model.
After conducting a comprehensive review of its organizational structure for two years, Qoala aims to optimize its operations to achieve profitability within the next 3 years.
Despite the layoffs, the company ensures that its employees receive benefits such as full health insurance extension, compensation for unused annual leave, repatriation support for those with work permits, recommendation letters, and other benefits.
Akseleran is a fintech peer-to-peer lending crowdfunding platform in Indonesia that connects SMEs in need of loans to develop their businesses with crowd lenders who have surplus funds to lend to these businesses.
Akseleran has conducted layoffs of approximately 60 employees. This termination of employment is part of a restructuring effort to position the company for optimal operations, long-term growth, and financial health.
CEO and co-founder, Ivan Nikolas Tambunan, emphasized that this restructuring is not a shortcut but a strategic step to maintain the financial stability of the company and strengthen its position in the market.
The decision to postpone the IPO until June 2024 is driven by challenging market conditions, making it difficult for the company to secure the right strategic investors at that time.
Lamudi is an online real estate platform that provides security and convenience for property sellers, buyers, and renters.
The number of affected employees was not specified in the announcement. The decision for restructuring is considered necessary to maximize growth and improve business efficiency.
As part of this process, impacted employees will receive severance packages in accordance with Indonesian regulations and will be supported in finding new job opportunities.
The staff layoffs at Lamudi in Indonesia were driven by the company's objective to enhance growth and optimize its business operations.
Despite experiencing significant growth over the past two years, including an impressive 88% increase in revenue, the acquisition of OLX Indonesia's property business in the fourth quarter of 2022 significantly expanded Lamudi's workforce from 200 to 900 employees.
Such rapid growth and increased size may have led to operational inefficiencies or redundancies, prompting the need for restructuring.
SeaMoney is a part of Sea Group operating in the financial sector. Its services include ShopeePay and SPaylater.
The company spokesperson stated that the layoffs were focused on one team and were part of their routine business operations review aimed at maximizing efficiency.
Although the exact number of affected employees was not disclosed, all of them were given a 14-day notice period in accordance with Indonesian regulations.
The layoff happened because SeaMoney wanted to make their operations more efficient. They reviewed their business and decided to reduce the number of employees on one team.
Sea Group, which includes SeaMoney, had a profitable quarter in Q1 2023, but they made this decision as part of their regular review of business operations.
Cars24, an India-based marketplace for used vehicles.
Cars24, an India-based marketplace for used vehicles, ceased its operations in Indonesia on May 3. The decision affected around 100 employees.
The company's co-founder and CEO, Vikram Chopra, officially announced the shutdown, revealing that Cars24 also pulled out of Saudi Arabia after extensive deliberation.
The move comes after the company expanded to Indonesia and Thailand in March 2022 but had to lay off 600 employees just two months later.
Sayurbox is an online shopping platform that allows users to order vegetables and fruits directly from farmers in Indonesia.
Sayurbox has conducted layoffs of some employees in the B2C team due to stagnation in the B2C segment's growth. The company has taken various efficiency measures, including consolidating B2C warehouses, combining instant deliveries into same-day deliveries for operational efficiency, and restructuring the team.
Sayurbox is committed to supporting the affected employees in finding new job opportunities and providing them with compensation packages in accordance with the applicable laws and regulations.
The decision to lay off employees is part of the restructuring process, which allows the company to reallocate resources and focus on the more successful B2B segment.
However, there are still some areas that can benefit from both B2C and B2B delivery services.
Oriente is one of the financial and technology service companies based in Hong Kong. The company was founded by Geoff Prentice (CSO) along with Hubert Tai (CEO) and Lawrence Chu (CFO) in 2017. The establishment of this company was driven by the vision of providing financial access, freedom, and opportunities for the community.
Oriente has closed its operations in Vietnam and significantly downsized its business unit in Indonesia. The fintech firm, which operates multiple subsidiaries in Southeast Asia, including Cashalo in the Philippines and Finmas in Indonesia, conducted several rounds of layoffs between June and December 2022.
The layoffs were due to financial difficulties faced by the company, and many of the terminated employees are still owed salaries.
To recover from the pandemic, Oriente attempted to launch new products, including Buy Now, Pay Later (BNPL) services, but still faced difficulties in adapting its business model to the online environment. The closure of operations in Vietnam and layoffs in Indonesia and other markets were part of the company's restructuring efforts to address liabilities and seek new funding.
However, the future remains uncertain for the laid-off employees as they face challenges in receiving their unpaid salaries and severance.
Shox Rumahan, an Indonesia-based social commerce startup. It operates in the field of online pooling for household necessities and household equipment.
Shox Rumahan ceased its operations and laid off all employees (100 people - according to their LinkedIn page) on February 25. The decision to close the company was due to "financial losses" as stated in an internal email.
The closure of Shox Rumahan was driven by the company's ongoing financial losses. According to an internal statement from the company's chief commercial officer and co-founder, Maria Octavyani Manao, the startup had been experiencing financial difficulties, leading to the decision to shut down its operations entirely.
Additionally, former employees stated on Twitter that the company had been facing losses for a period of two years.
Traveloka is Southeast Asia’s travel and lifestyle app. Traveloka provides access to discover and purchase different types of travel needs, local services, and financial services products.
Traveloka, a Southeast Asian online travel unicorn, has been implementing layoffs across different markets since January. The layoffs included at least two rounds of workforce reductions in Indonesia and axing at least seven people in Singapore, including senior managers.
The layoffs came after the departure of the chief operating officer in December 2022.
Affected employees were reportedly kept uninformed and did not receive prior notice about the retrenchment plans, causing fear that they might not receive compensation.
Traveloka has reduced its workforce in certain sectors (e-grocery and food delivery services) and prioritized its business in the online travel agency field. The layoffs at Traveloka appear to be part of the company's cost-saving measures and a shift in focus.
Avana is one of the social commerce platforms in Indonesia that aims to support and assist business owners, including SMEs, in optimizing their online marketing and sales through social media and websites.
Social e-commerce startup Avana, backed by Gobi Partners, is facing financial constraints that have led to difficulties in paying its employees in Indonesia.
Since November 2022, the company has undergone several job cuts, affecting approximately 30 members of its Indonesia team, as reported by multiple sources.
Due to financial constraints and a lack of capital, Avana made the decision to reduce its workforce. Not only did the company carry out layoffs, but some remaining employees who were affected by the layoff also reported that their salaries have not been paid since February.
GoTo is an Indonesia holding company from the merger of two major startups, Gojek and Tokopedia.
GoTo Group is planning to conduct another round of job cuts that will affect approximately 600 positions. The layoffs are part of the company's effort to accelerate company growth.
The goal of the workforce reduction at GoTo is to achieve profitability based on EBITDA by the fourth quarter of 2023. Therefore, GoTo plans to restructure the company, implement cost-saving measures, and focus on core businesses to achieve growth and financial stability.
Shopee is a leading e-commerce giant in Indonesia. Shopee has provided a seamless online shopping and payment experience.
Shopee laid off approximately 200 employees in Indonesia, primarily from the customer services team. The decision was made to enhance operational efficiency at Shopee Indonesia.
The layoffs at Shopee Indonesia are part of an effort to improve operational efficiency. As a result, around 200 employees are affected, and they will receive severance benefits according to the country's regulations, including a one-month salary bonus and access to health insurance for three months after their last working day.
Fazz is a financial services ecosystem that provides business accounts with payments, savings, and credit.
Before conducting the layoffs on March 1, 2023, Fazz implemented voluntary salary cuts and salary freezes for the founders/senior executives.
The affected employees will receive severance packages, a notice period as required by local laws, healthcare benefits for two months, financial and professional mental health assistance, as well as support in finding new job opportunities.
The decision to conduct layoffs is the result of exploring various cost-cutting measures, indicating that the company is facing financial challenges and striving to cope with competition in the competitive fintech market.
Despite the layoffs, Fazz affirms that they do not plan to conduct additional job cuts this year, demonstrating their commitment to stabilizing and strengthening their position in the market.
Zenius is a tech start-up company that focuses on the education sector in Indonesia and has been operating since 2004.
Zenius has conducted a reduction of 30 jobs. The decision was made to ensure its sustainability and long-term growth amid the current economic crisis that has been affecting the startup world.
Affected workers will receive severance pay according to local regulations and retain access to their health insurance benefits and wellness counseling until March 30, 2023.
The pandemic initially benefited Zenius due to the increased demand for online learning. However, with changes in the business landscape, Zenius needed to take steps to improve cost efficiency and ensure the company's success in the future.
Moladin, an Indonesian-based used-car marketplace that provides services for buying and selling used cars. Moladin aims to be a one-stop solution for the needs of automotive industry players.
Moladin has conducted layoffs affecting approximately 11% of their total workforce, which amounts to around 360 employees.
Moladin referred to the decision as a "difficult" one but necessary to ensure the long-term sustainability of the company.
The company assured that the affected employees will receive fair compensation in accordance with applicable laws, including medical benefits until May 2023, and job placement support to assist impacted employees.
Despite experiencing rapid growth and securing significant funding from reputable investors, Moladin faces its own challenges in the used car industry. Shifting its business focus to the used car market resulted in a substantial increase in transaction volume in recent months.
However, to achieve long-term sustainability, the company needs to optimize its operations, including reducing the number of employees.
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