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Expert calls for govt intervention amid tech industry mass layoffs

Tempo - November 22, 2022

Riani Sanusi Putri, Jakarta – The Center of Economics and Law Studies (Celios) Director Bhima Yudhistira on Monday suggested the government immediately create new jobs to accommodate tech industry workers who recently were hit by the mass layoff. He argues that the workforce in the field of digital startups must not be unemployed for a lengthy period of time.

"This is to avoid hysteresis or weakening of expertise. Because workers at the tail end of digital layoffs are high-skilled workers," said Bhima, Monday, November 21.

Indonesia is estimated to still lack 9 million workers in the digital ecosystem. He also suggested that the digital workers who were laid off should be taken in by State-Owned Enterprises (BUMN) and their derivative companies.

Causes of unhealthy competition

He also believes that the government should start strictly regulating the business models of digital companies, such as e-commerce and ride-hailing as he argues these industries are still often offering promotions and discounts on a large scale to maintain market share, which he deems economically unviable.

"New consumers would likely be tempted by the promos. But startups constantly committing to [this type of strategy] would actually be a suicide mission," he explained.

Bhima predicts a wave of layoffs will continue to occur in various other digital service companies such as financial services (fintech), education (edu-tech), to health (health tech). This is mainly driven by the general forecast of an impending global recession next year which will make competition for funds from investors even tighter.

Last weekend, there were mass layoffs at two digital companies from Indonesia, namely the homegrown tech giant PT GoTo Gojek Tokopedia and PT PT Ruang Raya Indonesia or Ruangguru.

GoTo and Ruangguru add to the ranks of companies that have enacted mass layoffs this year. Previously, Shopee Indonesia, Zenius, Tokocrypto, and TaniHub had also laid off a number of their employees. Even international companies such as Microsoft, Google, Meta, and Twitter are also taking the same steps.

Source: https://en.tempo.co/read/1659612/expert-calls-for-govt-intervention-amid-tech-industry-mass-layoffs