Tokopedia-TikTok Shop Organizational Restructuring: Layoffs, But Different

JAKARTA - Tokopedia-TikTok Shop's termination of employment (PHK) has confirmed the truth by the Ministry of Manpower (Kemenaker). They indicated that layoffs were planned to be carried out this week.

The Ministry of Manpower also encourages the Company to fulfill the various rights of affected employees. This underscores the government's commitment to protecting the interests of workers in the midst of the changing dynamics of the e-commerce industry.

Indah Anggoro Putri as Director General of Industrial Relations and Social Security for Manpower of the Ministry of Manpower, stated that we have communicated with the Tokopedia-Tiktok Shop. It is very likely that the layoffs will be carried out this week. Maybe tomorrow or the day after tomorrow," he said after attending a meeting with a joint opinion of Commission IX of the DPR, Wednesday 19 June.

Based on confirmation from Indah with the management of Tokopedia-TikTok Shop, it is estimated that around 300 employees will be affected by layoffs. Indah emphasized that the decision to lay off employees was solely due to a consolidation process that resulted in a similar division or position, not because of a replacement by foreign workers (TKA) from China such as rumors circulating.

Chairman of the Institute for Governance of the Internet ID Institute, Sigit Widodo, agrees that layoffs are difficult to avoid in a merger process.

"There will be positions filled with more employees than needed and will make the company inefficient," he said.

Sigit added that reduction is the main key to the e-commerce business.

"So even though it is less popular, layoffs must be carried out so that Tokopedia can still compete in the Indonesian and regional e-commerce markets," said Sigit, who is also a former COO of the Indonesian Internet Domain Name Management (PANDI).

On the other hand, Sigit hopes that Tokopedia employees who are laid off will receive proper compensation.

"Deserved compensation will be a win-win solution for both companies and employees who have been laid off," he said.

Sigit also asked that Tokopedia's layoffs not be used as an issue to bring down the company.

"Moreover, there are those who say that layoffs are carried out on thousands of employees and will be replaced by foreign workers from China. These are very unhealthy rumors and will disrupt the investment climate in Indonesia's e-commerce," said Sigit. Previously, Digital Economy Practitioner, Ignatius Untung also responded that there was no specific industrial phenomenon that could be identified as the direct cause of the layoff case for Tokopedia-Tiktok Shop employees. According to him, the decision to lay off layoffs was solely a response from the company after experiencing the consolidation process.

Ignatius said that the electronic trading industry or e-trade is still experiencing significant growth. However, he highlighted that currently many industry players are trying to achieve sustainable business growth is a challenge in market dynamics that continues to change. "When what to pursue is sustainable profit, the choice is to'releasing' employees," said Ignatius.

The latest data from the e-Conomy SEA 2023 research report released by Google, Bain & Company, and Temasek shows that the value of Indonesia's digital economy in 2023 is estimated to have increased by 8 percent, reaching 82 billion US dollars.

In the previous year, from 2021 to 2022, Indonesia's digital economy growth was recorded at 20 percent, up from 63 billion US dollars to 76 billion US dollars. This shows that despite lower growth in 2023 compared to the previous year, Indonesia's digital economy sector has continued to show significant positive growth.

The value of the digital economy mentioned in the research report refers to the Gross Merchandise Value (GMV). GMV is the total revenue value of goods and services sales transactions that occur on various digital platforms. The decline in Indonesia's digital economy growth rate is believed to be influenced by various existing macroeconomic challenges (macro headwinds).