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Gojek Cuts 9% of Its Employees Amid Covid-19

June 25, 2020 1:02 am

Beijing (PingWest)- Indonesian ride-hailing and payment firm Gojek will cut 430 jobs or 9 percent of employees and shut down its lifestyle service arm, Golife.

The layoffs primarily hit newer divisions GoLife and GoFood Festivals, which offered dining, cleaning and massage services.

Closing the two business units is expected to have a major impact on contractors providing service to GoLife, which numbered around 60,000 in 2019.

The layoffs signal Gojek’s determination to reinforce its core businesses to focus on digital payments, food delivery.

The layoff came after Gojek managers promised to transfer 25 percent of their salaries over the next year into a fund designed to support drivers, merchants and partners.

Established in 2010 as a ride-hailing firm, GoJek quickly evolved and expanded into a comprehensive lifestyle app that users can make online payments and order food and services, it claims to have 170 million users in Indonesia.

Gojek launched its payment business GoPay in 2015 to help micro, small and medium-sized enterprises gain more access to the digital economy. It has grown to become one of the ride-hailing company’s biggest business unit.

Gojek said GoPay has connected merchants to more than 170 million users in the region and processes billions of transactions each year.

The coronavirus pandemic has heavily hit the ride-hailing industry around the world as people avoid physical contacts.

Facebook and PayPal earlier this month showed confidence in Gojek, investing a large amount in GoJek. 

In June 2, Gojek announced that it has secured investment from Facebook Inc messaging platform WhatsApp and Paypal Holding as well as existing backers Google and Tencent. The latest investment is part of Gojek’s ongoing series F round and brings its total fundraise to over USD3 billion.

WhatsApp and Paypal did not disclose the size of the investment or the stakes they would receive.

Gojek said the latest capital investment will help micro, small and medium-sized enterprises to digitize further, and the corporation with Paypal will see its payment capabilities integrated into Gojek’s services. As a result, GoPay’s users will be able to gain access to PayPal’s network of more than 25 million merchants around the world.