Gojek lays off 430 employees amid pandemic impact

Indonesian ride-hailing decacorn Gojek declared found on Tuesday evening that it could lay away 430 employees, around 9 percent of its total workforce, as the COVID-19 pandemic has battered demand for its lifestyle services.

The layoff follows the company’s plan to close down its way of living division GoLife, which includes massage and cleaning services, and also its food court division GoFood Festival, as both saw “significant reduction in demand” during the pandemic, based on the company’s press statement.

Gojek, which currently operates found in five countries found in Southeast Asia, will instead concentrate on its core business, namely its ride-hailing services, foodstuff delivery and e-payment alternatives, downsizing its overall composition within the company’s long-term intend to adapt to the pandemic.

“The biggest challenge may be the remaining uncertainties later on, and the hurtful fact is that will forever change just how we operate our business and the merchandise you can expect,” the CEO duo of Andre Soelistyo and Kevin Aluwi said in a joint statement on Tuesday. “We have to react to what’s out there and increase our focus to create a strong, better business to survive.”

The CEOs said this might be the only employee reduction Gojek would help to make amid the pandemic, and the laid-off employees would receive severance pay, an equity arrangement and an outplacement program.

The social restrictions imposed in multiple regions in Indonesia to support the virus have battered the ride-hailing industry and the gig economy, as persons stay at home to avoid person-to-person contact.

Going forward, the business plans to develop its logistics service, which grew by 80 percent, in addition to its online grocery sector, which possessed doubled its transactions since the start of the COVID-19 outbreak.

Previously, Gojek reported that its groceries, food and package delivery services were still growing amid the pandemic, regardless of the steep blow to its passenger transportation business.

In April, the company’s senior management trim their salaries to allocate a lot more than Rp 100 billion (US7.09 million) to greatly help motorists and employees cope with low require through the COVID-19 pandemic.

“We possess done each of the measures to optimize the business to continue developing and presenting impacts,” Andre stated in an email to the company’s staff members.

Recently, Gojek’s e-wallet GoPay received an undisclosed volume of expenditure from Facebook and PayPal in a fresh round of funding.

Gojek’s announcement about the layoff comes just one week after its Southeast Asia ride-hailing rival Grab announced a regionwide layoff around 5 percent of its staff members, citing “the stark impact of COVID-19.”