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Gojek Cuts 430 Jobs As Indonesian Economy Slows Down Due to Covid-19

June 24, 2020, 03.05 AM

JAKARTA, –Indonesia's ride hailing and payments giant Gojek has turned to downsizing to remain competitive as the Covid-19 pandemic continues to wreak havoc on the global economy.

The firm has laid off 430 employees or nine percent of its workforce.

Reducing numbers

In a press release issued by Co-CEOs Kevin Aluwi and Andre Sulistyo on Tuesday, June 23, the company announced that the cutbacks will affect GoLife and GoFood Festival, as they are the services hit hardest during the Covid-19 pandemic.

“Macroeconomic and public trends have showed that GoLife services, like GoMassage and GoClean, as well as GoFood Festival in select locations, have experienced reduced demand [during the Covid-19 pandemic],” they said.

Also read: Indonesian Ride Hailing Giant Gojek Expected to Downsize Work Force

“[Due to the coronavirus], the public is more wary of activities where physical contact is inevitable, while social distancing is impossible.” Both men said GoLife and GoFood Festival will still apply until they are phased out on July 27.

They said no further layoffs are likely to happen in the company during the coronavirus pandemic.

Back to basics

Kevin and Andre said Gojek will focus its resources on its core businesses.

“We will emphasize the transportation, food delivery and electronic money or cashless payments for the long term in the wake of Covid-19," they said. "These services are still much in demand.”  

But Kevin and Andre added that Gojek still has its eye on the future.

Also read: Grab Reduces 5 Percent of Workforce Due to Coronavirus Pandemic

"We will develop our logistics services as it experienced 80 percent growth during [the coronavirus] pandemic," they asserted. "The [GoShop] grocery service has also been making strides as its revenue doubled during this period." 

Supporting affected employees

Both said that they will pay severance to employees, with the amount relative to the number of years of service.

Other benefits include equity arrangement, or the right to buy Gojek stocks, support services, and outplacement programs to help employees find jobs elsewhere.

Thinking for the future

Gojek’s move comes as it finalizes an investment round of more than $3 billion at a valuation of $10 billion by investors Facebook, PayPal, Tencent and Google.

Gojek is known as Indonesia's premier unicorn, or startup worth a billion dollars. The company has earned decacorn status, as its net worth is over 10 billion dollars.

The ride hailing industry has been hard hit by the Covid-19 pandemic, with companies like Lyft and Uber among the most affected companies.

Gojek's cutbacks comes after Grab reduced five percent of its workforce, or 360 of its employees earlier this June. The move is effective in Southeast Asia, including Indonesia.

(Writer/Editor: Tunggul Wirajuda) 

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