June 23, 2020 / 6:41 AM / 23 days ago

UPDATE 2-Indonesian ride-hailing firm Gojek cuts 9% of headcount

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By Fanny Potkin and Anshuman Daga

SINGAPORE, June 23 (Reuters) - Indonesian ride-hailing and payments firm Gojek announced on Tuesday it would lay off 9% of its employees, or 430 workers, and close down its lifestyle services arm, GoLife.

A spokesman said the company would "prioritise its high-impact core businesses of payments, transport and food delivery in a long-term response to the COVID-19 pandemic."

Reuters reported earlier on Tuesday that the firm would announce layoffs, citing people with knowledge of the matter.

Gojek said it was cutting 9% of its employee headcount, with the layoffs being primarily in its lifestyle division, which offered cleaning and massage services.

Shutting the units is expected to have a knock-on impact on contractors providing services to GoLife, which numbered around 60,000 in 2019.

The startup said it would also close down the food courts it operates, known as GoFood festivals.

Sources familiar with Gojek's finances said it was finalising an over $3 billion investment round at a $10 billion valuation; Facebook and Paypal announced investments in Gojek's fintech arm earlier in June, and it also counts Google and Tencent among its backers.

Founded in 2010 as a ride-hailing firm, Gojek has since evolved into a one-stop app through which users can make online payments and order food and services, and claims 170 million users in Indonesia.

Widespread closures over the coronavirus pandemic have battered the ride-hailing industry and the gig economy, with firms cutting jobs globally.

Last week, Singaporean rival Grab announced it would cut under 5% of its workforce as it looks to ride out the impact of the outbreak.

The impact in Southeast Asia has been severe, with 11 drivers for Grab and rival Gojek earlier telling Reuters their income had dropped by more than half during the outbreak. (Reporting by Fanny Potkin and Anshuman Daga; Editing by Kim Coghill, Clarence Fernandez and David Evans)

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