JD.ID, the Indonesia arm of Chinese e-commerce giant JD, has let go of 30% of its workforce, or close to 200 employees, the company said on Tuesday.
“This downsizing exercise is necessary to respond to the current challenges and rapid changes in business,” said Setya Yudha Indraswara, JD.ID head of corporate communications and public affairs. He added that the company is committed to supporting the affected employees by providing insurance and compensation according to the applicable regulations as well as through talent recommendation programmes.
Earlier in May, JD.ID let go of over 90 employees as part of its restructuring exercise actions, and last month, DealStreetAsia reported that the e-commerce firm laid off a significant portion of its headcount in Thailand. Asked in November, JD.ID’s spokesperson said there were no “plans to conduct further layoffs in Indonesia”.
The new development comes amid speculation that JD could be looking at a potential exit from Indonesia and Thailand as early as Q1 next year. JD.ID is also reportedly seeking investors to take over the company and its shares.
While the firm denied the report, this new development shows that all is not well with the company. Launched in 2015 via a JV with Singapore-based investment firm Provident Capital, JD.ID has been struggling to capture market share in Southeast Asia’s largest economy. It was ranked only 10th among the most visited e-commerce sites in Indonesia in the second quarter of 2022, according to iPrice.
Industry observers indicated that the lack of a competitive edge as well as the lack of fintech offerings and logistics network could be hurting its business in Indonesia.
“All marketplace platforms should have a key uniqueness that makes them top of the mind for consumers and merchants. We don’t really see what’s the main competitive advantage for JD.ID, which is perhaps what makes it difficult to compete with other players,” said Bhima Yudhistira, Executive Director of the Center of Economic and Law Studies.