(Bloomberg) -- Gojek, the ride-hailing and delivery giant competing with Grab Holdings Inc., will cut 430 jobs or 9% of employees as it grapples with the economic fallout of the coronavirus pandemic.
Many of the staff reductions hit newer divisions GoLife and GoFood Festivals, Indonesia’s largest startup said in a statement. The household services and dining divisions will shutter in July, it said.
The move underscores Gojek’s effort to streamline its core businesses to focus on digital payments, transport and food delivery, which are aimed at helping the so-called super app move toward profitability. Gojek goins arch-rival Grab in culling stuff, as Asia’s largest technology startups grapple with global corinoavirus lockdowns.
“The biggest challenge is the level of uncertainty ahead and the hard fact that this will forever change how some of our businesses and products need to operate,” Co-Chief Executive Officers Andre Soelistyo and Kevin Aluwi said in an internal email to employees Tuesday.
The staff reductions come after Gojek managers pledged to funnel 25% of their salaries over the next year into a fund designed to support drivers, merchants and partners. The budget assigned for annual employee salary increases was also redirected, producing a total pool of roughly $6 million.
Read more: Grab to Cut 5% of Employees in Another Setback for SoftBank
Technology companies across the globe have been shedding workers in large numbers since the coronavirus was declared a pandemic three months ago. In Asia, Grab and Oyo Hotels were among the largest startups so far to have culled staff. A tracker maintained by Layoffs.fyi estimates that 500 tech companies have cut about 64,400 jobs as of mid-June.
Facebook Inc. and PayPal Holdings Inc. this month revealed they had invested in Gojek, showing confidence in its efforts to create a digital payments platform in the region. Gojek is now backed by some of the world’s largest internet companies, including Alphabet Inc.’s Google and China’s Tencent Holdings Ltd.
Gojek made the announcement Tuesday evening after a series of 16 internal townhall meetings attended by employees.
“Today, in each townhall, I felt like I’d failed so many of our colleagues,” said Aluwi. “I’d like to personally apologize for what we unfortunately had to do.”
(Updates with comments from co-CEOs from the fourth paragraph.)
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