TikTok Owner ByteDance to Cut Jobs in Indonesia Following Tokopedia Merger
ByteDance, the parent company of TikTok, is planning to lay off around 450 employees, or 9% of its Indonesian e-commerce team, following the merger of TikTok Shop with GoTo Group’s Tokopedia, according to a Bloomberg report
The job cuts, which may begin as early as this month, are aimed at reducing duplicate functions and aligning the workforce after the $1.5 billion merger that saw ByteDance acquire a controlling stake of 75.01% in Tokopedia
Broader Trend in Chinese Tech Industry
The planned layoffs at ByteDance’s Indonesian operations are part of a larger trend in the Chinese tech industry. The economic downturn has led to massive job cuts in major companies like Alibaba and Tencent Holdings.
TikTok, ByteDance’s popular video-sharing platform, also recently slashed jobs globally, with hundreds of employees being let go from the marketing and operations teams as part of a larger overhaul of the business.
TikTok Shop’s Success in Indonesia
Indonesia was a successful market for TikTok Shop early on, with the platform facing stiff competition from rivals like Sea Group’s Shopee and Alibaba’s Lazada. The merger with Tokopedia was a key strategic move by ByteDance to adhere to local regulations and maintain its presence in the Indonesian e-commerce market.
Regulatory Changes in Indonesia
In September 2023, Indonesia’s Ministry of Trade announced new regulations prohibiting social media platforms from facilitating direct sales of products or using customer data for e-commerce purposes[4][5]. This led to TikTok Shop officially ceasing operations in the country on October 4, 2023
The Indonesian government cited concerns over the impact of social e-commerce on local small and medium-sized enterprises (SMEs) as the primary reason for the ban. Merchants in Jakarta’s Tanah Abang Market, the largest wholesale center for textile and garment in Southeast Asia, protested against TikTok Shop, claiming it had forced them to shut down their businesses and lay off employees.
Navigating Regulatory Challenges
ByteDance acknowledged the need to reorient its products and business operations to align with the new regulations in Indonesia. The company stated that it would communicate with users, merchants, logistics providers, payment servicers, and other partners to ensure the fulfillment of orders and maintain communication with sellers[4].
ByteDance also expressed its commitment to actively engaging with the local government and relevant authorities to complete the product and business transformation, with the ultimate goal of resuming operations as soon as possible and exploring innovative avenues to effectively serve Indonesian businesses and users[4].
The planned job cuts at ByteDance’s Indonesian operations reflect the challenges faced by tech companies in navigating regulatory changes and adapting to market conditions. As ByteDance navigates the merger with Tokopedia and the new e-commerce regulations in Indonesia, it will need to strike a balance between streamlining operations and maintaining its presence in the rapidly evolving Indonesian market.
