Last Friday (14 June), TikTok announced a round of layoffs of ‘the combined entity’ of TikTok Shop and Tokopedia, the latter being the former top ecommerce platform that TikTok acquired in recent months to (re)gain access to Indonesia’s ecommerce market. 

The rumours of layoffs started spreading at the beginning of the month, with famous Indonesian tech blogger Ecommurz revealing information on Instagram: 

  1. Nearly 80% of Tokopedia’s products and services will be retired or replaced with TikTok’s internal systems;

  2. An internal evaluation had concluded that nearly 70% of Tokopedia’s employees are ‘redundant and unnecessary”

  3. Tokopedia had an employee count of 2772 in its latest regulatory filings;

  4. The layoffs will take place in phases until the end of the year. Governance, Trust & Safety, Creator Operations and Account Managements will be the first impacted;

  5. ByteDance is seeking to “acquire another major Indonesian tech firm”. 

While we would not verify the authenticity of the information above, there has also been rumours of the scale of layoffs, from hundreds to thousands. We think that the 450 figure reported by Bloomberg is probably more trustworthy. Bloomberg also reported that TikTok Shop/Tokopedia in Indonesia had a combined employee count of about 5000. 

Some thoughts about the unfolding events: 

  1. In our analysis “winners & losers of the TikTok-Goto deal” last December, we put “employees of Tokopedia” in the “Not so clear” category, and raised the question “How would they, especially the managers, fare in the combined entity?” 

  2. No doubt that TikTok Shop has much more sophisticated and efficient products and systems compared to Tokopedia. However, that is not entirely Tokopedia’s fault. ByteDance emerged from the ruthless competition in China, where hundreds of billions of US dollars were collectively invested between 2011 and 2016 (refer to Episode 36 of the Impulso podcast for details). ByteDance was able to tap into the infrastructure, talent and supply chain, something that Tokopedia was not able to because of the limited scale of market and investment;

  3. ByteDance is known to be a very data-driven company that engineers the “factors of production”, including employees and systems, to maximise efficiency. Such shakeoffs and restructurings in its China operations happen fairly frequently (e.g. they shut their entire gaming businesses at the end of last year). How much this culture can be adapted effectively into an Indonesian work environment is interesting to observe;

  4. The timing of the layoffs – almost exactly midpoint between presidential election (Feb) and swearing in of the new cabinet (Oct) – is interesting. Politicians are busy making deals and trade-offs, as you can see from the recent press headlines;

  5. In the longer term and ongoing basis, TikTok Shop will need to balance some of the political and domestic considerations in Indonesia. Learning from the ban last year, we believe it is already doing a good job supporting Indonesian sellers and enablers, ensuring other domestic suppliers (such as logistics companies) get part of the growth is also a good start.

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].


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Jianggan Li is the Founder & CEO of Momentum Works. Prior to founding Momentum Works, he co-founded Easy Taxi in Asia, and served as Managing Director of Foodpanda. The two years running Rocket Internet companies has given him a lifetime experience on supersonic implementation, and good camaraderie with entrepreneurs across the developing world. He holds a MBA from INSEAD (GMAT 770) and a degree in Computer Engineering from Nanyang Technological University. Unfortunately he never wrote a single line of code professionally - but in his first job he was in media, travelling extensively across Asia & Europe, speaking with Ministers & (occasionally) Prime Ministers. Apart from English and his native Mandarin, he is also fluent in French and conversational in Cantonese & Spanish. He tried to learn Latin (for three years) and Sanskrit (for six months) as well. In his (scarce) free time, he reads, travels, hikes and dives. Pyongyang, Tehran & Chisinau are among the interesting cities he has been to.