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Bytedance to lay off 450 employees in Indonesia after merger with Tokopedia

Jakarta Globe - June 14, 2024

Alfi Dinilhaq, Jakarta – Chinese tech giant Bytedance is planning to lay off 450 employees in Indonesia as it restructures operations after merging its e-commerce unit TikTok Shop with Tokopedia, owned by local tech conglomerate GoTo Gojek Tokopedia. The layoffs represent 9 percent of Bytedance's workforce in Indonesia.

The formal merger of Tokopedia and TikTok Shop Indonesia under PT Tokopedia took place in January. TikTok now holds a controlling stake of 75 percent, with an investment commitment of over $1.5 billion (Rp 24 trillion) to support Tokopedia's operations. Earlier this year, Tokopedia finished integrating its systems with TikTok Shop, resulting in the Shop-Tokopedia brand.

RA Koesoemohadiani, GoTo's Corporate Secretary, stated that the company is a non-controlling minority shareholder. "To the best of our knowledge, PT Tokopedia continues to review the effectiveness of their organization," Koesoemohadiani said in a disclosure to the Indonesia Stock Exchange (IDX) on Thursday.

PT Tokopedia's Director of Corporate Affairs, Nuraini Razak, confirmed that the layoffs resulted from the merger. "We had to make necessary adjustments to the organizational structure as part of the company's strategy to continue growing," Nuraini said in an official statement on Friday.

Director General of Domestic Trade at the Trade Ministry, Isy Karim, confirmed the layoffs of 450 workers in ShopTokopedia. "This step was necessary to reduce redundant positions, such as roles with the same responsibilities in both Tokopedia and ShopTokopedia," Isy said at the Parliament Complex on Thursday.

Heru Sutadi, a technology analyst and Executive Director of ICT Institute said the layoffs in companies undergoing mergers are unavoidable due to overlapping roles, which lead to inefficiencies.

"We need to look at this on a case-by-case basis. The layoffs at Tokopedia are not due to a 'tech winter' like other companies facing competition, outdated technology, or lack of funding, which results in workforce reductions. Tokopedia's case is different," Heru said on Thursday.

The Tokopedia-TikTok merger came after Indonesia banned social media apps from running e-commerce activities as a way to protect Indonesian micro, small and medium enterprises (MSMEs).

Source: https://jakartaglobe.id/business/bytedance-to-lay-off-450-employees-in-indonesia-after-merger-with-tokopedi