Chances are Startup still going to Layoffs Employees in New Normal

Some startups such as Grab, OYO, and iFlix do Termination of Employment (layoff) because of the business hit by the corona pandemic. The Indonesian E-Commerce Association (idEA) and the Indonesian Venture and Startup Capital Association (Amvesindo) estimate, layoffs will still occur despite entering a new normal phase.

IDEA Head of Content and Internal Communication Vriana Indriasari said that the new normal had not signaled the end of the coronavirus pandemic. The new normal is only one way for the government to save the Indonesian economy from the effects of the Covid-19 pandemic.

She hopes that startups will not let their guard down, even though they will enter a new normal phase. Startup companies must think of strategies to be able to grow sustainably in the midst of a pandemic. “Must adapt to the existing development. Must be aware of every new normal form carried out by the public as consumers,” Indri said.

Innovation will help startups survive in a pandemic. “Adjustment and innovation are clearly the cornerstones of success so that businesses can survive, or even get back on the track like they were before the pandemic,” she said.

While Amvesindo Chairwoman, Jefri R Sirait, said that layoffs were one of the policies of every company to maintain business continuity. “This situation is pain-sharing. This condition will depend on the company’s efforts,” he said.

In line with Indri, he recalled startups to not let their guard down and continue to apply crisis management. Businesses must determine strategies for the present and the future. Therefore, the potential for layoffs cannot be lost.

IdEA Chairman Ignatius Untung also briefly stated, salary cuts to layoffs are not only potentially carried out by startups, but also companies in general, whose income is depressed due to the corona impact.

Grab Laid-off 5% of Its Employees

Grab fired 360 employees or 5% less than the total employees affected by the corona pandemic. Grab Co-Founder and CEO Anthony Tan promised not to terminate the employment termination again until the end of this year.

Tan admitted, the company had tried everything to avoid layoffs. However, the dismissal was inevitable. “We sincerely apologize for what happened today. To those affected, we owe you a further explanation,” he said.

Since February, Grab has been examining the impact of the Covid-19 pandemic on the company’s business. However, Grab is concerned that the pandemic will result in a prolonged recession and the company is preparing itself for a long-predicted recovery period. Over the past few months, Grab reviewed all cost components, reduced expenses, and implemented salary cuts for senior management.

“Nevertheless, we realize that there must still be a leaner organization to overcome the economic challenges of the post-pandemic coronavirus,” he said. The company also stopped several non-essential projects and consolidated functions in order to be more efficient. In addition, it forms the right team size to suit business needs.

OYO Indonesia Dismissed 50% of Employees to Prevent Layoffs

Hotel chain startup from India, OYO has laid off or given leave to around 400 employees or 50% of total employees in Indonesia. This was done to avoid Termination of Employment (FLE) due to business stressed by the corona pandemic.

The company emphasized that laid-off employees still get salaries, not unpaid leave. “There is an adjustment to wages,” said the Country Head of Human Resources at OYO Hotels and Homes Indonesia, Benny Rachmadin, during a virtual press conference on Wednesday (6/17).

In addition, the company pays a number of dependents to employees such as insurance and holiday allowances (THR) last Idul Fitri. Benny emphasized that the benefits were paid in full based on the salary value before any adjustments were made.

OYO Hotels & Homes Indonesia Emerging Businesses Country Head Eko Bramantyo added that the decision to lay off employees was in accordance with the mandate of the parent company. This was done so that OYO could survive in the midst of a coronavirus pandemic.