This article was originally published in Chinese by Xu Zhang, translated into English by the MW team.
Last Friday (10 March), GoTo announced layoffs of about 600 employees. This is another major layoff at GoTo after 1,300 jobs were cut last year.
According to GoTo’s statement, the aim of the layoff is to “to create a more streamlined organization that is better equipped to respond to market demands”. At the same time, “GoTo Financial’s merchant business would be redesigned” – It seems that Mitra Tokopedia, an application for MSMEs, is affected.
However, some friends told us that more than 600 people were leaving the organization in the current round- several sources put the number to be between 1,000 and 1,500.
Some others were affected by changes in location and conditions which prompted them to leave the organization- such as relocating from Singapore to Indonesia. Lazada used a similar approach when it shifted its design and technology team from Thailand to Shenzhen.
Shopee also announced layoffs of 200 employees last week – mostly affecting its customer service team in Indonesia. The timing of Shopee and GoTo’s layoffs in Indonesia is interesting: Ramadan begins on 22 March 22, when many workers traditionally take time off to go home, and the majority of the employees are supposed to receive a one-month bonus.
We heard that tech employees inside GoTo plan to form a union to demand transparency of layoff plans.
Momentum Academy has done some comparisons of key business/financial metrics and cash positions of the leading tech platforms in Southeast Asia, such as SEA Group, Grab and GoTo – you can refer to the recent report “Apples to Apples: Benchmarking Shopee, Grab, GoTo and other major tech platforms” – GoTo’s position may be the toughest of the three, both in terms of market share and cash condition.
US-listed SEA Group and Grab have both reported better-than-expected Q4 2022 results recently (check out: Our thoughts on Sea Group Q4 and Grab Q4 results) – while GoTo, listed on the Indonesian Stock Exchange, will report next week (around 20 March).
Earlier this month GoTo announced acceleration of adjusted EBITDA breakeven target to be Q4 2023 – before the earnings announcement; because of last week’s layoffs, many friends are wondering what GoTo’s earnings are like.
Anyway, we’ll find out soon.
As mentioned above, for more details on how to make sense of the myriad of reported metrics by key platform companies, do refer to our report “Apples to Apples: Benchmarking Shopee, Grab, GoTo and other major tech platforms”.
We will update the report when all the platform companies covered within have reported their FY 2022 financials towards the end of this month – stay tuned!