GoTo will lay off 10% of employees to pursue profitability

GoTo Group will lay off 10% of its employees or the equivalent of cutting more than 1.000 jobs in the near future. Reported Bloomberg, the company is limiting costs in an effort to pursue profitability.

According to sources, a 10% cut in GoTo employees will have an impact on all divisions of the company. Operating in Indonesia, Singapore, and Vietnam, GoTo has 9.630 permanent employees as of the end of June 2022. GoTo is rumored to have around 455 non-permanent employees by the end of 2021.

The layoff plan that will be carried out by GoTo adds to the list of technology companies that have also carried out similar activities this year. Starting from Meta, which reportedly laid off employees, to Twitter and Apple Inc.

DailySocial noted that throughout 2022, a number of startups laid off. Among them, Carsome Reported layoffs of 10% regional employees, Coinworks lay off as many as 70 people or 8% of its total employees, Xendit do rightsizing teams as much as 5% in Indonesia and the Philippines, up to tokocrypto as many as 45 employees from a total of 227 employees.

Previously, the parent company marketplaceShopee, Sea Ltd has also laid off about 3% of its employees in Indonesia as part of the company's regional efficiency to cut losses and improve reputation in the eyes of investors.

Focus on profitability

In financial statements GoTo H1 2022 is listed as a business Gojek and Tokopedia did pretty well this time of year. 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.

In detail, income from service fees shot 102,93% on an annual basis to Rp7,99 trillion. Then, advertising fees rose 417,77% to Rp1,16 trillion, delivery services rose 24,33% to Rp907,71 billion. Rewards for transactions and payments are now recorded at IDR 424,39 billion.

In reaching a position of profitability, as a consequence, the company has to invest a lot at the beginning. According to the financial statements presented in the first semester of 2022, the company suffered a loss attributable to the owners of the parent entity of Rp13,64 trillion, an increase of 117,28% (YoY). Meanwhile, in the first semester of 2022, the company experienced a net loss of IDR 6,28 trillion.

In the article Bloomberg Also mentioned, in August, GoTo reported its second-quarter adjusted loss before interest, tax, depreciation and amortization widened to Rp4,14 trillion ($264 million) from Rp3,9 trillion a year earlier.

Since IPO in April, GoTo's shares fell by 40%. GoTo said it was in talks with its owners for a controlled sale of their stock, trying to avoid a potential drop in the stock when their holding lockup ends on November 30.