Gojek cuts 9% of staff; shutters GoLife and physical F&B verticals

INDONESIAN ride-hailing firm Gojek is laying off 430 employees, representing 9 per cent of its regional headcount, and shutting down non-core verticals as it faces financial pressure amid the Covid-19 pandemic. 

In a statement on Tuesday evening, the company also announced that it will be ceasing two non-core segments: GoLife, which offers at-home massage and cleaning services, and GoFood Festivals, the company’s physical food business. Most of the laid-off employees work for these two segments. 

In a series of 16 internal townhall meetings, Gojek’s co-chief executives Andre Soelistyo and Kevin Aluwi told employees that the startup will now be prioritising three core verticals, payments, transport and food delivery, in a “long-term response to the Covid-19 pandemic”. 

In an e-mail to employees, Mr Andre said: “We had previously optimised the company for growth and impact and we imagined, naively, that the rate of growth would always accelerate. We didn’t plan enough for the inevitable downturn and we are paying for that now.”

Mr Aluwi added: “For those of you who we’ve had to let go, please know that this was something that both Andre and I fully recognise as our fault, not yours. We are sorry that this time, we have failed you.”

Laid-off staff will receive a minimum of four weeks of salary, with an additional four weeks’ pay for each year served. Gojek will also waive the annual cliffs on equity, so that laid-off employees have stakes in the company. 

The layoffs  come shortly after the startup raised an undisclosed sum from tech giants Facebook and PayPal, reportedly taking its ongoing Series F round to over US$3 billion and valuing the firm at about US$10 billion. 

Just a week ago, rival Grab cut about 360 employees, representing just under 5 per cent of its regional workforce. The ride-hailing businesses of both Grab and Gojek have been battered by the Covid-19 pandemic.

In an interview last week, Gojek's Singapore general manager Lien Choong Luen told reporters that recovery for the startup's ride-hailing business here is uncertain, but looks promising.

As of July last year, Gojek had over 230 employees in Singapore, The Business Times previously reported. The company has over 14,200 employees listed on networking site LinkedIn across all its operating markets.

Mr Lien had said last week: "(On) what the trajectory (for recovery) looks like for the end of this year - I think the jury is (still) out for how long it will take to recover."

He had dismissed talk that Gojek may be better off focusing on its home market of Indonesia than chasing regional growth.

A Gojek spokesperson said last week that the company remains committed to achieving a 50:50 split between its home market of Indonesia and its international markets, namely Singapore, Vietnam and Thailand.

The spokesperson had also said that Gojek "remains committed to a long-term, sustainable presence in Singapore".