TikTok responds to the downsizing of Tokopedia: organizational restructuring with the challenges of the Indonesian electricity market
In response to reports of downsizing of Tokopedia, TikTok issued an official statement as its controlling shareholder. According to media reports such as Kompas and Tempo, this reduction was part of a second wave of large-scale lay-offs, following the merger of TikTok and Tokopedia in January 2024, affecting a total of some 1,070 employees.
In his statement, the spokesperson for TikTok stated: “We regularly assess and adjust business needs in order to strengthen the organizational structure and provide better quality services to users”. Although the number of staff reductions was not clearly identified, TikTok emphasized its continued investment in Tokopedia and the Indonesian market, aimed at promoting sustainable growth and innovation.
TikTok acquired 75.01 per cent of Tokopedia ‘ s shares on 31 January 2024 with $1.5 billion (approximately 23 trillion Indonesian rupees) as its controlling shareholders, and the GoTo Group retained 24.99 per cent of its shares. The merger enabled TikTok to re-enter the Indonesian electricity market, which had previously suspended online retail services due to government regulatory restrictions. However, the consolidation of operations resulting from the merger has led to a restructuring of the organization, leading to a loss of staff. In June 2024, the first round of staff reductions had reached some 450 staff, mainly because of duplication of roles and efficiency.
In July and August 2025, Tokopedia was retrenched, involving 180 and 240 people, respectively, affecting various sectors, including information technology, customer services, warehousing and logistics. Nuraini Razak, Vice-President of Business Communications, Tokopedia, had previously stated that lay-offs were the result of a review by business units to eliminate redundant roles and aimed at building stronger electricians and market teams. As a result of this reduction, the total number of Tokopedia employees in Indonesia is expected to drop to about 2,500, or 50 per cent of the pre-merger size of about 5,000.
TikTok’s statement did not directly confirm or deny the number of staff reductions, but rather described them as part of the “regular operations assessment”, emphasizing the optimization of the organizational structure to improve the quality of services. The statement also reaffirmed long-standing commitments to Tokopedia and the Indonesian market, stating that investment would continue to promote sustainable growth and innovation. This statement reflects the intense competitive pressures that TikTok is facing in Indonesia’s electricity market, particularly in competition with rivals such as Shopee (53.22 per cent market share) and Lazara.
Since the merger, TikTok Shop ‘ s market share in Indonesia has increased from 12.2 per cent to 27.37 per cent, while Tokopedia ‘ s share has fallen to 9.57 per cent. This increase is due to live shopping in TikTok, social content integration and game-based shopping experiences, but the integration process also presents challenges. Vendors complained that TikTok Shop ‘ s sales dashboard was complex and unfriendly and that the tight advertising policy had led to some vendors going to other platforms. In addition, Tokopedia’s “smart warehousing” service ceased operations on 15 August 2025, further highlighting operational adjustments in integration.
Tokopedia ‘ s lay-offs are not isolated events, but are part of the global optimized cost and efficiency of the science and technology industry. Since 2022, China’s technology giants, Ali Baba and Tents, have been laid off by tens of thousands of people, and byte they themselves have made global layoffs as a result of the economic slowdown and regulatory pressures, including the restructuring of their marketing and operations teams in 2024. Local start-ups in Indonesia, such as Xendit, Lamudi and LinkAja, were also laid off in 2022-2024 as a result of adjustments in economic conditions, reflecting the prevailing pressure on the industry.
