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More tech startups in Southeast Asia laid off workers this year Empty More tech startups in Southeast Asia laid off workers this year

周五 12月 09, 2022 4:02 am
More tech startups in Southeast Asia laid off workers this year, as macro headwinds widened losses and venture capitalists pushed startups to extend their runways.

Last week, online marketplace Carousell announced it was letting go about 10% of its headcount — or approximately 110 positions.

In November, Indonesia’s GoTo Group — a merger between ride-hailing giant Gojek and e-commerce marketplace Tokopedia — cut 1,300 jobs or about 12% of its headcount.

Both companies cited challenging macroeconomic challenges.

They join Sea Group

and other companies in the region in downsizing headcount. Sea Group, according to local media, laid off more than 7,000 employees over the past six months.

“Founders are being prudent managing costs in this environment to ensure there is sufficient runway till late 2024,” Jia Jih Chai, co-founder and CEO of Singapore-based e-commerce brand aggregator Rainforest, told CNBC. Chai was previously a senior vice president at Carousell and a managing director at Airbnb.

“There are signs that we are entering into a recession, if we are not already in one. Therefore, customer demand is likely to be slower in 2023,” said Chai.

In a note to Carousell’s employees, CEO Quek Siu Rui acknowledged “critical mistakes” were made. He said he was “too optimistic” about the Covid recovery and underestimated the impact of growing his team too quickly.

“The reality is that we were quick to grow our expenses and hire, but the returns took longer than expected,” said Quek, adding that there have been cost-cutting measures in the past few months and Carousell’s leadership will take voluntary pay cuts.

More sustainable growth

Quek also said it’s only prudent that the company get to profitability as a group as quickly as possible, as it is unclear if market conditions will improve.

Carousell posted a slower revenue growth of 21% in 2021 at $49.5 million, compared to a tripling of its revenue in 2020. Meanwhile, GoTo saw its losses swell from the January to September period.
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“I was astonished that companies predicted that the Covid behavior changes would last forever,” Alex Kantrowitz, a Silicon Valley journalist, who also runs an independent newsletter and podcast called Big Technology, told CNBC’s “TechCheck” Monday.

“Clearly, once you are allowed to go out to restaurants, hang out with friends outside, your usage of Netflix, Facebook, Shopify and Amazon would go down. So why do all of them build as if that would last forever?”

Tech layoffs have been increasing in Southeast Asia this year. GoTo Group, Glints and Carousell are the most recent companies to downsize their headcounts — within the last 30 days.
“Founders are being prudent managing costs in this environment to ensure there is sufficient runway till late 2024,” said Jia Jih Chai, co-founder and CEO of Singapore-based e-commerce brand aggregator Rainforest.
Venture capital firms also actively advised startups to extend their runways, according to venture partners CNBC spoke to.


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