The layoff storm is caused by several external factors, spanning interest rate enhancement, inflation issues, and the war between Russia – Ukraine.
Heaptalk, Jakarta — The layoff storm phenomenon around Indonesia‘s startup ecosystem during 2022 has delivered great attention from various parties, including investors.
Responding to this terrible phenomenon, the Founding Partner of AC Ventures, Pandu Sjahrir, explained several external factors that influence the layoff determination in the startup ecosystem, including an increase in interest rate, inflation issues, and the war between Russia – Ukraine, affecting the cost of capital around the market.
Further, Pandu added, “This turbulence is considered a business cycle that will carry out numerous business transformations more quickly. As we know, the two years of the COVID-19 pandemic have impacted people’s behavior transformation from an offline to an online scheme, generating a significant development of the technology company at the time. This situation had inflicted a high expectation on investors toward the founders,”
On the other hand, regarding the other factors, this professional investor disputed the human resource salary value is not the high salary of digital startup talent is not the critical factor causing a massive layoffs storm in Indonesia. Pandu measured the granted salary amount to the employees as a trend to catch the skillful for last year, which has decreased as of this year along with the stock price reduction, and high compensation of technology startup, compared to the corporate.
“The most significant expenses are not solely from the human resources in the business. Many technology companies have refocused on their business by reducing burning costs, starting from marketing costs and business processing costs that have been lowered significantly,” Pandu said in his statement.
As an investor, Pandu realized these matters had switched the business objective for the startup industry, including venture capital firms’ party concerns, to obtain more business profitability, removing a market share domination objective.
Welcoming 2023, Pandu conveyed that this year is an appropriate momentum to reset the business scheme, specifically for coming startup founders. He expected the startup practitioners would amplify their business core, notably for the company’s cash flow to be more sustainable.
“We observe that 2023 is an attractive year, along with numerous reshaping moves from the industries side. For this reason, the founders of a new startup, particularly in Indonesia, are anticipated to build the company with improved quality. Also, we suggest the founders would not solely focus on the company’s market share yet on how to provide a product fit with more efficient operational expenses,” concluded Pandu.
