Exclusive: Bukalapak sheds hundreds of smart retail, internet-of-things, and marketing roles

Indonesian ecommerce unicorn Bukalapak confirmed reports that it has laid off “hundreds of employees,” but told Tech in Asia that the move is part of a normal “tidying up” process as the company strives to become financially sustainable.

The layoffs were the result of an adjustment in strategy and efficiency improvements, said Teddy Oetomo, Bukalapak’s chief strategy officer. The company is discontinuing its smart retail and internet-of-things divisions – both of which were experimental in nature and not a core business focus, according to Oetomo – leading to job cuts among engineers.

Meanwhile, the startup shed some marketing roles because of  “overexpansion.” Oetomo pointed out that certain tasks can actually be fulfilled through synergies with partners like Emtek, the Indonesian media conglomerate that’s also an investor in Bukalapak. He added that core functions like digital marketing remain unaffected.

In total, less than 10% of the company’s 2,500-strong workforce were affected, Oetomo said.

“[We] need to align internally to execute our long-term business strategy, make the necessary changes, and decide on a path to follow,” he said in a statement. And while growth in gross merchandise volume remains an important measure for ecommerce players, Bukalapak “has progressed to the next stage and has successfully delivered an increase in monetization, cementing our path to profitability,” he added.

A company spokesperson also explained earlier that the “tidying up” process also includes things like system upgrades and process improvements.

The goal to become financially sustainable means that the company is not looking to raise new funding at the moment, said Oetomo. The company last raised funds earlier this year, a US$50 million round from Line parent Naver and Korea’s Mirae.

“We have sufficient capital to bring us to positive EBITDA, if everything goes according to plan,” he explained.

It also means that Bukalapak will continue to be the “last [Indonesian] unicorn that is majority Indonesian-owned,” said Oetomo, citing the fact that later-stage fundraising among the country’s tech companies tend to be dominated by foreign investors.

Bukalapak recently announced a 3x increase in gross profits for 2019. Oetomo also said in his statement that the company has halved its EBITDA loss in the past eight months.

Along with more than 4 million merchants on its platform, the startup also claims to have more than 2 million small-business partners in its Mitra Bukalapak program.

Earlier this year, it also unveiled a new feature called BukaGlobal, which lets consumers who based outside Indonesia shop on the Bukalapak platform.