ByteDance Ltd.’s e-commerce arm TikTok Shop is eliminating several hundred jobs in Indonesia in its latest round of cuts, slashing costs after taking over the operations of local rival Tokopedia last year.
The Chinese social media giant is reducing staff across e-commerce teams including logistics, operations, marketing and warehousing, according to people familiar with the matter. More cuts are set to happen as soon as July, said one of the people, who asked not to be identified because the discussions haven’t been made public. The reduction leaves Tokopedia and TikTok Shop with about 2,500 employees in total in Indonesia.
A TikTok spokesperson said in a statement that the company regularly assesses its business needs and makes adjustments to strengthen its organization and serve customers better, without elaborating. “We continue to invest in Tokopedia and Indonesia as part of our strategy to drive sustainable growth and innovation,” the spokesperson said.
TikTok Shop is accelerating an overhaul of its Indonesian operations, reducing a significant portion of the staff it obtained after combining with GoTo Group’s Tokopedia in a $1.5 billion deal. Indonesia is among the earliest markets for ByteDance’s e-commerce ambitions — and thus far the biggest — but competition is intense with rivals such as Sea Ltd.’s Shopee and Alibaba Group Holding Ltd.’s Lazada.
Following the completion of TikTok Shop and Tokopedia’s combination early last year, ByteDance’s Indonesian e-commerce business had about 5,000 employees.
The unusual pact, which resulted in GoTo being a passive backer of the merged e-commerce operation, allowed ByteDance to restart its Indonesian business and comply with regulations introduced to halt its online-retail service. Indonesia put in place the rules to protect its local e-commerce services and small businesses from getting hurt by larger, foreign companies.
This week, Indonesia’s antitrust agency said its investigation found that there was a significant increase in market concentration following the combination, raising the risk of monopolistic practices. TikTok Shop and Tokopedia should ensure that users can choose payment and logistics methods and that there’s no self-preferencing or predatory pricing by the platforms. –BLOOMBERG
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