IDX-listed tech giant GoTo announced on Friday that it will lay off 600 employees following a streamlining of its business that involves the consolidation of various divisions.
The company said it is undertaking a consolidation of certain businesses and teams across the ecosystem. “For example, it is redesigning GoTo Financial’s merchant business and combining its two offline merchant teams into one,” said GoTo, adding that the changes will help the company deliver a more cohesive experience to merchants, while also reducing costs.
“A number of areas have been identified where changes are necessary to further strengthen our operations,” a GoTo spokesperson said in the statement.
GoTo is also reassessing priorities and will scale down businesses and projects deemed to be non-core while prioritising current business needs. The company will wind down certain parts of Mitra Tokopedia business offerings so that it can place teams and resources in the place where they can make the most impact.
“Furthermore, new technology will play a key role in accelerating the speed of execution, reducing manual reconciliation and margin for error, as well as improving services. This includes using self-serve tooling that will ensure smoother running, better services and faster data handling,” GoTo said.
Last month, GoTo had said it would become profitable, in terms of adjusted EBITDA and group contribution margin, earlier than expected. The company now expects its adjusted EBITDA to become positive in the fourth quarter of 2023, while its group contribution margin is set to become positive in the ongoing quarter (Q1 2023), which is a year ahead of schedule.
In November last year, GoTo had announced that it would let go of 1,300 people or 12% of the group’s workforce.
GoTo’s salaries and employee benefits expenses more than doubled to 7.41 trillion rupiah in H1 2022 from 3.64 trillion rupiah in H1 2021.
“Over the past year, we have been implementing a plan designed to accelerate our profitability, based on revenue optimisation, cost management, and ecosystem product growth. We have the right team in place, and sufficient funds to execute our plan, as we focus relentlessly on building Indonesia’s most impactful technology ecosystem that creates value for all,” Soelistyo told reporters in February.
Meanwhile, GoTo Group CFO Jacky Lo said the contribution margin in Q4 2022 exceeded guidance, while gross transaction value (GTV) and gross revenue were both well within the company’s guidance. In the December quarter, GoTo’s GTV grew 18% on an annual basis to 162 trillion rupiah. For the full year 2022, GTV increased 33% to 613 trillion.
Sea Group e-commerce arm Shopee‘s Indonesia unit is also understood to be laying off workers, mostly in the customer service division, DealStreetAsia has learnt. They are scheduled to meet the HR department on March 14 to discuss further details on compensations, sources said.