Southeast Asia’s on-demand multi-series giant gojek said in an internal email communication today that it will let go of 430 people (about nine per cent of the workforce).
Additionally, the firm will close two of its products — GoLife, which offers at-home services of massage and cleaning, and GoFood Festivals, its physical food locations.
Many of the employees affected by this retrenchment decision are from GoLife and GoFood Festivals units.
According to the firm, 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 July 27.
gojek said these measures will provide it with the resources to focus on the business areas where it has the most impact, primarily encompassing its three core services, but also the services that have shown promise as a result of the pandemic such as logistics, which has grown by 80 per cent since the pandemic began, or groceries, which has more than doubled.
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.
This comes amidst the reports that the tech giant is finalising an investment round of more than US$3 billion at US$10 billion valuation. As per a Bloomberg report of May, gojek has already raised this funding.
gojek recently revealed that Facebook and PayPal had invested in this round.
Below is the internal email sent to the company from gojek Co-CEOs Andre Soelistyo and Kevin Aluwi:
After what was an emotionally tough day for everyone, we wanted to extend a heartfelt thanks to you all for listening, participating and understanding. The reason we held a townhall for each division within the company, instead of a company-wide one, was because we wanted to be present on a more personal level as we delivered the news, and to give you the chance to understand what this means for each of you on a departmental basis.
You heard from both of us how COVID-19 has affected our business and presented us with multiple challenges that we must all work to solve. The biggest challenge is the level of uncertainty ahead and the hard fact that this will forever change how some of our business and products need to operate.
We must respond to the external environment and increase our focus on building a stronger, more efficient business that will stand the test of time and stay relevant. Focusing on our core services, shutting down verticals that are no longer viable during this period, and making bold bets on changing customer needs will ensure that we continue making a positive impact on the lives of millions of people while securing future growth. But we’re sorry that the reality of implementing this has to be so painful.
The journey gets more difficult from here as we begin the process of separating from the 430 employees many of us have grown close to, while also closing down GoLife and GoFood Festivals – businesses that have played important and prominent roles in Gojek’s history.
With that in mind, we both wanted to share some individual thoughts.
“Five years ago, we had a moment when Gojek almost ran out of funds; payroll was due in a few days and without more money, we would not be able to pay everyone that month. I was calling people left, right and centre for emergency funding (in fact, at the time Andre sat on our board and he was one of the people I reached out to) on the stairs of our previous office, which overlooked the 150 or so people who were depending on us to find a solution.”
At that moment, I had a deep appreciation of the fact that our employees had put their hopes, dreams and ambitions into this small startup, and if the company did not survive, we would be failing every single one of these people. Thankfully, we managed to secure funding and the rest is history.
One of my biggest fears as a leader is failing all of you, hence that was by far the hardest moment I had at Gojek, until today. Today, in each townhall, I felt like I’d failed so many of our colleagues. I’d like to personally apologise for what we unfortunately had to do. For those of you who we’ve had to let go, please know that this was something that both Andre and I fully recognise as our fault, not yours. We are sorry that this time we have failed you. We are truly grateful that you have contributed meaningfully to Gojek’s success over the years and are a valued part of our story; any company would benefit greatly to have you on their team and we will do everything possible to help you make the next step in your career. Please feel free to reach out to me directly if you’d like to talk.”
“When we started out as Co-CEOs, I told everyone that I wanted to be a steady hand through whatever situation Gojek encountered. I hope that promise gives some reassurance that it was only after a huge amount of thought and soul searching that we came to this conclusion. This has been the most difficult decision that I have had to make at Gojek. I wish we had built a company that could carry all of us to the next chapter. But in the end, given all of the uncertainties in front of us, it has to be about the mission that we all undertook and making sure that this mission continues to grow and live on long after all of us are gone.
We had previously optimised the company for growth and impact and we imagined, naively, that the rate of growth would always accelerate. We didn’t plan enough for the inevitable downturn and we are paying for that now. But do I regret that? No I don’t, because at the very least, it meant that we got to work together with so many special individuals on a collective mission together. Even if only for a short time.
To those that are leaving, I know that this series of events may have left you with some sadness, anger and disappointment. If you will allow me to ask one thing of you, I ask that you never lose your love of Gojek. I hope that whenever you are on the road, and you see our Gojek driver partners proudly wearing the green jacket and helmet, you will always be reminded and feel proud, that you played a pivotal role in making all of this happen.”
Started in 2010 with a mission to improve the livelihoods of local ojeks (motorcycle taxis), gojek has now grown to become a super app that offered multiple on-demand services, including food ordering, commuting, digital payments, shopping, and hyper-local delivery.
As of 2018, gojek claims to have processed more than US$9 billion annualised gross transaction value across all markets where it operates — Singapore, Thailand and Vietnam.
During its 11 years of existence, gojek has secured about US$4.5 billion across 10 funding rounds from the likes of Google, Tencent, Facebook, PayPal, and Mitsubishi. Over these years, it has also acquired a dozen companies, including Moka, Coins.ph, and AirCTO.
Recently, Ajay Gore, Group Chief Technology Officer of gojek, announced his departure after serving the tech giant for about six years.
This article was first published on e27, on Jun. 24.