Why Indonesia's Start-up Industry Fires Many Employees?

Indonesia's start up industry is facing a big challenge to gain profit instead of burning money.
Indonesia's start up industry is facing a big challenge to gain profit instead of burning money.

The phenomenon of layoffs for start-up employees has occurred in Indonesia in recent years. There are a number of reasons why start-up companies in Indonesia are forced to lay off thousands of employees.

The recent layoffs of startups are said to have something to do with the road to profitability phenomenon, as the antithesis of the bubble burst that occurs in startups.

Road to profitability can be said to be a phenomenon of awareness that startups as business opportunities do not only grow by burning money, but grow with strong business operation fundamentals and provide profits.

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CEO of Cloud Hosting Indonesia, Alfian Pamungkas, assessed that Indonesian start-up players are starting to prioritize their business focus and business operational performance. This will affect several aspects of the company's operations, including product acumen, operational efficiency, and the creation of healthy cash flows.

Alfian is concerned about the phenomenon of start-ups that are experiencing financial difficulties. Not a few start-up companies recorded a loss of financial performance.

He reasoned that the growth of start-ups was not commensurate with the number of funding needs for working capital support for startups.

The economic policy of the United States is also suspected to be the trigger for the world's macroeconomic conditions, which in turn encourages start-ups to also reformulate their business priorities to improve their operational performance.

Alfian said the development of startups in Indonesia went hand in hand with the growth of the internet from year to year. Internet users are getting easier and increasing every year, becoming a great opportunity for startup founders to develop their business.

Based on Startup Ranking data, in March 2022 there were 2,331 startups in Indonesia and were in fifth position in the world. The number of small companies and startups in Asia-Pacific continues to grow.

Forbes launched the inaugural Forbes Asia 100 to Watch report. This report highlights emerging small companies and startups in the Asia-Pacific region.

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