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Indonesia's 'tech winter' continues as Ajaib announces layoffs

Jakarta Post - December 1, 2022

Wike D. Herlinda, Jakarta – Fintech start-up Ajaib has decided to layoff 67 employees, joining the ongoing axing spree afflicting Indonesia's tech industry.

Through a statement released on Tuesday, the investment super app announced it was currently planning a sustainable business strategy.

"To ensure the company's readiness in facing the uncertain macroeconomic condition, we have been forced to downsize [our workforce], which affects 67 employees," the statement quoted an unnamed Ajaib spokesperson.

The statement also said the fintech firm was making sure that the affected employees would receive compensation in line with all statutory regulations, an additional severance bonus of one month per year of service and employee health insurance for the next 6 months that also covered their families, as well as counseling support while they searched for their next job.

In addition, the statement said Ajaib management had voluntarily reduced their salaries, while its founders would receive no pay.

"All of these efforts will have no impact on the continuity of the company or its services to Ajaib customers. Going forward, Ajaib has prepared a strong business strategy to continue realizing financial inclusion in Indonesia," the statement said.

In the past three years, the statement continued, Ajaib had boosted financial inclusion in the country through its digital financial services. These efforts and the development of Ajaib as a business was inseparable from the dedication and hard work of our teams, it added.

Experts say the wave of layoffs that has been sweeping through the local tech landscape for the last two months is not surprising, as the same situation was happening across the globe, similar to the recent trend that happened among tech giants in Silicon Valley.

The so-called tech winter has affected several household names such as Shopee, Xendit and TokoCrypto.

However, the scrutiny has most recently focused on GoTo, one of the country's biggest tech firms that went public earlier this year that announced on Friday it was laying off 1,300 employees, equivalent to 12 percent of its workforce.

Yorlin Ng, the COO of Singaporean venture firm Momentum Works, said tech companies had enjoyed a "good decade" of near-zero interest rates, which had prompted the industry to be growth-focused without prioritizing efficiency.

For that reason, Ng said, layoffs were due to come sooner or later, while noting that "how they would take place and to what extent they would happen could not be predicted".

"Big tech companies have had a good decade, but no one should take good times with almost zero interest rate for granted," he said on Nov. 22.

Source: https://asianews.network/indonesias-tech-winter-continues-as-ajaib-announces-layoffs