Alodokter employees protest over layoffs, dispute severance pay

Dozens of people, including nine recently laid-off employees and 30 worker solidarity members from various companies, held a rally outside Alodokter‘s Jakarta office on Tuesday. The demonstrators criticized the job cuts and its severance pay policy, alleging that the healthtech startup had violated Indonesia’s labor regulations.

One of the affected workers told Tech in Asia that Alodokter had terminated 12 IT staff members, most of them senior employees with over four years of experience. Of those, nine had rejected the layoffs and chose to protest the move.

Photo provided to Tech in Asia by protesting employees

According to the source, the protesting employees believe that their severance pay – calculated at 0.5 times their monthly salary per year of service – is far below the one-month-per-year standard required by labor regulations. In a statement released by the demonstrators, they argue that the calculation breaches labor laws, emphasizing that Alodokter had reported “significant profits.”

The SoftBank-backed firm rejected the allegations. Suci Arumsari, co-founder and president director at Alodokter, told Tech in Asia that the layoffs and severance payments comply with Article 43, Paragraph 1 of Government Regulation No. 35 of 2021 and cited the company’s continued financial losses as justification for the decision.

No resolution yet

The regulation stipulates that if the layoffs stem from efficiency measures due to losses, workers are entitled to 0.5 times the standard severance pay, along with tenure-based compensation and payment for unused leave. Arumsari added that affected Alodokter staff received these additional compensations together with their severance pay.

However, Arumsari did not disclose details about the nature or extent of the losses. She also did not confirm the number of employees affected by the move. Initiated in early November, the job cuts were intended to streamline certain divisions for “operational sustainability” and to ensure the company’s “future stability,” she explained.

Founded in 2014, Alodokter provides information on diseases, medications, and other health-related topics. According to the company, it has over 30 million monthly active users and more than 80,000 doctors on its platform.

Alodokter’s most recent fundraise was a US$5.2 million series D round in February, bringing its total disclosed funding to US$49.7 million. In 2023, the company launched a chat-based virtual assistant for doctors. At the time, CEO Nathanael Faibis told Tech in Asia that the startup was putting a “big focus” on becoming profitable soon.

See also: Alodokter sees stagnant revenue, cuts losses by half in 2022

Despite the firm’s explanations, the retrenched staff insisted that Alodokter had not complied with labor regulations. During the protest, company management invited worker representatives for a dialogue, but the discussion ended without a resolution.

“The meeting was held on the side stairs of the Noble House [Alodokter’s office building] lobby, showing management’s lack of seriousness in handling this issue transparently and professionally,” the protesting employees said in their statement.

They also urged the company to reconsider the layoffs and resolve the matter fairly. If their demands are not met, they plan to organize more protests while awaiting further communication from Alodokter’s management.

Besides Alodokter, other Indonesian healthtech companies have also slashed jobs in recent years. Competitor Halodoc, for instance, axed a portion of its workforce in November 2023 to “ensure better productivity across the company.”