However, misfortune tipped the scale in its favor, overshadowing any achievement and led many to see the year as a gloomy “tech winter.”

Industry players and insiders said this downward trend was mainly an aftermath from the global macroeconomic turbulence.

“Macro challenges hogged the limelight in 2022. Higher inflation and interest rates pushed consumers, small and medium enterprises [SMEs], [bigger] enterprises and governments to tighten their belts,” said Roshan Raj Behera, the Southeast Asia partner of Indian management-consulting company Redseer.

Accordingly, Behera said many companies had to prioritize profitability over growth within a short time span, turning start-ups and tech companies to undertake painful pivots.

“Unfortunately, these changes led to redundancies in multiple roles and responsibilities. These have been a global trend and Southeast Asia was no exception,” Behera explained on Dec. 16, regarding what swept over the region.

Closing the year with a Dec. 2 layoff of 200 people or 30 percent of its workforce, JD.ID joined dozens of Indonesian start-ups that chose to axe its workers on the argument of efficiency for the sake of its survival.

“Adjustment needs to be taken by the company to answer the challenge of current fast shifting business. One of the steps the management took was undergoing downsizing so the company can adapt to changes,” JD.ID head of corporate communications and public affair Setya Yudha Indraswara said on Dec. 15.

This news came as a surprise remembering how JD.ID had already laid off 200 people in the first half of 2022 and yet many saw it coming as the rumor of JD Global trying to unplug its operation in Southeast Asia has been circling for some time, despite the company’s initial denial.

“Up until today, there has never been any talks regarding this [dissolution] rumor in JD.ID’s management [...] For us, everything is still on track, so there’s no reason to confirm [those] rumors,” a JD.ID spokesperson told The Jakarta Post on Nov. 30.

Read also: JD.ID denies disbanding its operations in the Indonesian market

JD.ID’s Chinese counterpart had been trying to find investors to take over up to no avail, making it likely for its operation to be put to a full stop by the first quarter of 2023, as reported by Sina, a Chinese media.

Thunder in paradise

This year’s cold tech winter also landed on the lap of GoTo Group and the storm struck hard, it being the largest tech company in Indonesia who went public the same year it decided to fire 1,300 people.

“This hard decision is inevitable as the company is looking to become more agile and maintain the growth rate so it can keep giving a positive impact for consumers, driver partners and sellers,” reads GoTo’s press statement released on Nov.18 regarding the layoff issue.

After the news on its layoff broke, GoTo made another headline as its share slid off by more than 70 percent from its initial public offering (IPO) price. The extreme drop took place right after its lock-up period expired, which indicated that early backers wanted out as soon as they are contractually allowed to, the company’s claim on path to profitability notwithstanding.

Read also: GoTo shares nosedive on ‘external’ factors

Pilarmas Investindo Sekuritas director Maximilanus Nico Demus said that investors’ abrupt exit could be understandable due to how “they have their own time horizon” and he highlighted the fact that some early backers chose to stay.

Maximilanus argued that this dark turn of the tech industry was purely due to external factors, given the hike of interest rates and rising inflation. Tech companies were put in the corner when they decided to axe their workers and “it’s not always a bad thing” because these companies must adapt to the current situation to secure their future valuation.

“The tech industry was reliant on fundraising and they experienced pressure as interest rates spike. […] However, the question is, will that last forever? Of course not,” said Maximilanus on Dec. 16.

He went on to say that this macroeconomic turbulence affected everyone, not only the tech industry. Yet, Maximilanus maintains his optimism when the gap between interest rates and inflation are closing in.

“Next year will be a year full of challenges and hope, why? Because it’s always darkest before dawn,” Maximilanus said, adding that “the first semester of 2023 [will be challenging], but the tech industry will rebound in the second semester.”

Concurring with Maximilanus, Yorlin Ng, chief operating officer of Momentum Works, a Singaporean venture outfit, said she believes there would be a boom in tech again, “perhaps very soon.”

“The current macroeconomic uncertainties have sustained longer than people previously expected. With potential drops in revenue and/or profit, as well as increasing difficulties in securing external funding, companies need to be cautious on cost,” Ng said on Dec. 16, explaining the main reason behind the wave of layoffs.

Ng said that the current axing spree was not uninformed because macroeconomic uncertainties paved the way for efficiency and sustainability imperatives to override growth considerations.

She went on to explain that the layoffs depend on specific tech companies’ long-term strategies, for instance, “a few large tech companies are keeping their business development team to continue to manage clients, whilst some large tech companies which have cut ‘non-core’ functions still keep strategic tech teams [such as AI] so that they will remain competitive after the current crisis.”

On top of JD.ID and GoTo Group, several well-known Indonesian tech players had to go through the same fate of letting employees go; they are Shopee, Xendit, LinkAja, Ruangguru and Zenius.