Indonesia's Bukalapak to lay off employees as it shuts physical product sales ops

Bukalapak has announced plans to lay off a portion of its workforce following the company's decision to close its physical product sales operations.

This restructuring aligns with a strategic pivot toward virtual goods, including mobile credits, data packages, and utility bill payments, as the Indonesian eCommerce major looks to streamline its focus on digital services.

In a statement, Cut Fika Lutfi, corporate secretary of Bukalapak, confirmed that the closure of physical product sales would affect a number of employees across the company's ecosystem. However, the company assured that it would fully comply with labour laws, ensuring affected employees receive their rightful compensation and benefits.

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The company's decision to refocus its business comes in the wake of fierce competition from rivals such as Shopee and Tokopedia. Bukalapak is aiming to align itself with higher-growth potential segments and strengthen its position in the digital marketplace.

The transition will see the cessation of physical product orders by 9 February 2025, with the marketplace continuing to offer services for virtual products and payments.

Despite these adjustments, Bukalapak has stressed that its core marketplace platform, including its app, website, and Mitra Bukalapak services, will remain fully operational. The company has also reassured that its strong financial standing would ensure minimal impact on revenue, even as it exits the physical goods market.

Sales of physical products on the Bukalapak platform contribute approximately 3% to the company's total revenue. "This move supports our efforts to achieve positive EBITDA and ensure the sustainability of a healthy and profitable business," the company stated.

Following the announcement, Bukalapak's stock price took a hit, falling nearly 5%. The decline marks a stark contrast to the company's market debut in August 2021, when Bukalapak's shares surged by the daily limit of 25% following a successful US$1.5 billion initial public offering.

In its most recent financial report, Bukalapak posted a loss of IDR 593.23 billion (US$36.47 million) for the first nine months of 2024.

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