Weeks after Grab’s announcement of headcount cuts, fierce competitor Gojek is now said to be cutting its headcount by 9%, resulting in 430 employees being laid off. The company is said to be shutting down “non-core verticals” such as GoLife, which offers home massages and cleaning services, and physical food business GoFood Festivals. In a statement to Marketing, the company said that these businesses are dependent on close human interaction, and have seen a significant downturn over the past few months as the COVID-19 pandemic has affected consumer habits. GoLife will close on 27th July.
A spokesperson also added that the businesses being closed are Indonesia-only businesses, and job losses are primarily at an HQ level. "Our broader International business remains a source of great growth, and we’ll continue to invest in this," it said. She added that the company has been pivoting its business to accommodate new consumer habits since the pandemic began. It has also worked closely with merchant partners to accommodate changes in demand, helping offline merchants quickly migrate their businesses online and implementing various initiatives to support the livelihoods of driver partners. "New business areas have also been explored including the sale of everyday staple goods and ‘ready to cook’ meals on GoFood and enhanced delivery services," she added.
The announcements were made in a series of 16 internal townhall meetings attended by all employees. During the townhall, Gojek said that it will prioritise its high-impact core businesses of payments, transport and food delivery in a long-term response to the COVID-19 pandemic. The spokesperson added that townhalls were held for each division to allow the co-CEOs to deliver the message on a more personal level and to give employees the chance to understand in more detail what the changes mean for them as well as to ask questions.
Staff affected are said to receive at least four weeks of salary with additional four weeks’ pay for each year served. Gojek HQ employees who are negatively affected by this will be provided with benefits including enhanced severance payments, health insurance scheme extension, outplacement support and being allowed to keep their laptops to help with their future job search.
In a joint statement from Gojek co-CEOs, Andre Soelistyo and Kevin Aluwi said: "COVID-19 has presented us with a big challenge and focusing on our core services is clearly the best strategy for us to continue to make a positive impact on the lives of millions of people and to secure future growth.”
In March this year, the two co-CEOs promised to donate 25% of their annual salary over the next 12 months to a newly-created support fund for its driver partners and merchants. Named the "Gojek Partner Support Fund", the fund aims to support Gojek's drivers, merchants and other partners whose income has been adversely affected by economic slowdown caused by the COVID-19 pandemic.
In a similar move, Grab announced last week that it will be cutting its workforce by about 360, representing 5% of its employees. The company declined to comment if the marketing team is impacted and the markets hardest hit, when asked by Marketing.
Moving forward, the company will also be sunsetting some non-core projects, consolidating functions for greater efficiency, and right-sizing teams to better match changing business needs given the external environment. However, it is doubling-down on delivery verticals and has redeployed its staff to meet the increased customer demand for deliveries. Grab declined to comment on which projects it will be sunsetting.
Get the daily lowdown on Asia's top marketing stories.
We break down the big and messy topics of the day so you're updated on the most important developments in Asia's marketing development – for free.subscribe now open in new window