Reasons for GOTO Lay Off 12% of Employees, Want to Be More Efficient and Focus on Core Services

After a lot of news regarding the issue work termination, The GoTo Group finally gave an official statement regarding the company's efficiency strategy. This was conveyed today (18/11) through town hall which involves all employees and is led directly by the GoTo Group CEO Andre Soelistyo.

As much 1.300 people or around 12% of the total permanent employees The GoTo group will soon be laid off on efficiency grounds. The company stated that this is a strategic step that must be taken in an effort to accelerate the company's financial independence.

As is known in financial statements GoTo group as of semester I (H1) 2022, the company is said to still experience a loss attributable to owners of the parent entity of IDR 13,64 trillion, an increase of 117,28% yoy. As for the first semester of 2022, the company experienced a net loss of IDR 6,28 trillion.

Global macroeconomic challenges also have a significant impact on business players around the world. This efficiency decision was taken so that the company is more profitable agile and able to maintain positive growth rates for all stakeholder in the ecosystem.

It admits that this efficiency is a difficult decision but can not be avoided. Therefore, the company is committed to providing comprehensive support during the transition period considering the contribution of employees to the company so far.

Affected employees will receive a compensation package in accordance with the laws and regulations in each country where GoTo operates. More than that, GoTo also provides a number of financial supports such as an additional one month's salary, as well as compensation in lieu of the notification period (notice-in-lieu).

In addition, the company also provides job search support and counseling services. Affected employees are entitled to own the laptop they are currently using, access various training programs, and be able to join the GoTo alumni directory and receive recommendations for work within the GoTo group's network of business partners. This facility will be available until the end of May 2023.

Throughout 2022, a number of startups have been monitored for business efficiency by laying off their employees, among others Xendit, JD.ID, LinkAja, Shopee, HappyFresh, and Tokocrypto.

Next focus

In a previous presentation, GoTo's management itself stated that the company currently has a priority to accelerate steps towards profitability. One of the efforts made is to focus on core services, namely on-demand, e-commerceand fintech.

business segment on-demand GoTo will continue to grow, as people's mobility gradually returns, especially on the sides online food delivery (OFD). GoFood services have now become an integral element of people's daily lives. The acceleration of this service has become significant, one of which is thanks to the pandemic.

In addition, GoTo is said to have recorded an increase in performance in the business segment E-commerce and fintech. In detail, this business recorded good performance with an increase in gross income of 57 percent to IDR 4,01 trillion from IDR 2,56 trillion for e-commerce. Then, followed fintech rose 52 percent to IDR 759,43 billion from the previous IDR 501,22 billion.

Andre also explained that the company's strategy of shifting from a subsidy-based business to product differentiation worked well, as shown by the increased use of cross-platforms, and provided space for companies to sharpen their focus and increase the number of loyal customers which resulted in high-value monetization.

The second quarter of 2022 displayed quality and sustainable growth, supported by increased monetization, more effective incentive spending, and more optimal utilization of operating expenses. GOTO posted net revenue of IDR 3,38 trillion, up 73,32% yoy from IDR 1,96 trillion in the same quarter in the previous year.

Since the beginning of the year, his party admits that they have evaluated the optimization of overall costs, including the alignment of operational activities, the integration of work processes, and the renegotiation of various cooperation contracts. At the end of the second quarter of 2022, the company recorded a structural cost savings of IDR 800 billion from various aspects, including technology, marketing and outsourcing.