Indonesia's GoTo Cuts 1,300 Workers or 12% of Total Employees

CORPORATE ACTION - JAKARTA. Indonesia's biggest tech firm PT GoTo Gojek Tokopedia Tbk (GOTO) said on Friday it was laying off 1,300 workers, or 12% of its workforce, joining a wave of technology firms retrenching after years of rapid hiring due to an uncertain economic outlook.

"Challenging global macroeconomic conditions are having a significant impact on businesses around the world and GoTo, like other prudent companies, is making adjustments to ensure it can navigate the uncertain road that lies ahead," it said in a statement.

GoTo said it has achieved around 800 billion rupiah ($51 million) in cost savings in the first half of this year through efficiency measures in technology, marketing and outsourcing.

"However, the company has determined that further measures must be taken to ensure it is equipped to navigate the challenges ahead," it said about the job cuts.

GoTo, which offers ride-hailing and financial services, went public in April with a $1.1 billion stock sale.

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Its shares are trading 44% below its initial public offering price, as investor sentiment on the tech sector sours amid soaring inflation and interest rates.

Shares in GoTo rose 2.8% on Friday after announcing the job cuts.

The company, backed by SoftBank Group Corp, Alibaba Group and Singapore sovereign wealth fund GIC, is exploring a coordinated secondary offering of shares held by pre-IPO shareholders after a lock-up period ends on November 30.

It reported in August that its half-year net loss more than doubled to nearly $1 billion.

In recent months, Southeast Asia's largest-ecommerce firm Shopee cut jobs in various countries and shut some overseas operations as parent Sea SE.N struggle with losses.