JAKARTA – TikTok Shop, the e-commerce platform owned by ByteDance Ltd, is reported to plan mass layoffs of its employees in Indonesia.

Cited by Bloomberg on Friday (30/5), the layoffs are part of a cost-cutting effort following the acquisition of Tokopedia last year.

Sources familiar with the matter said staff across various e-commerce teams, including logistics, operations, marketing, and warehousing, will be targeted for layoffs.

The layoffs are scheduled for July. After the layoffs, the total number of employees at Tokopedia and TikTok Shop in Indonesia is expected to drop to around 2,500 people.

A TikTok spokesperson said the company routinely evaluates business needs and makes adjustments to strengthen the organisation and better serve customers, without providing further details on the layoffs.

“We continue to invest in Tokopedia and Indonesia as part of our strategy to drive sustainable growth and innovation,” the spokesperson said.

TikTok Shop is restructuring its operations in Indonesia, particularly by reducing much of the staff it acquired after merging with Tokopedia, which is owned by GoTo Group, in a US$1.5 billion deal.

Indonesia remains one of ByteDance’s key markets for its e-commerce ambitions and is still the largest market despite competition from Shopee (Sea Ltd.) and Lazada (Alibaba Group Holding Ltd.).

The merger of TikTok Shop and Tokopedia was completed early last year, with ByteDance’s combined e-commerce business in Indonesia employing about 5,000 people.

This unusual merger, where GoTo became a passive supporter of the joint e-commerce operations, allowed ByteDance to restart its business in Indonesia while complying with government regulations that had halted its online retail services.

The Indonesian government has introduced regulations to protect local e-commerce services and small businesses from the impact of larger foreign companies.

This week, Indonesia’s antitrust agency also revealed the results of its investigation, finding a significant increase in market concentration following the merger, raising the risk of monopolistic practices.

TikTok Shop and Tokopedia are expected to ensure users have choices in payment methods and logistics, and to avoid self-preferencing or predatory pricing practices by the platform. (DH/ZH)