The recent layoffs in Indonesia’s two decacorn ride-hailing apps Gojek and Grab have forced the start-ups to reassess their pursuit of becoming “super-apps” as the pandemic has pushed them to retire some of their noncore businesses, experts have said.

Starting their businesses as ride-hailing applications, both Grab and Gojek have been racing to become apps that meet all users’ needs. They now offer various services, from passenger transportation and food and goods delivery to financial services and hotel and ticket booking.

“The COVID-19 pandemic will force both Grab and Gojek to reorganize and focus on three core services: ride-hailing, food/grocery delivery and financial services,” Fitch Solutions wrote in a research note on Thursday.

On June 16, Grab, which is valued at US$14 billion, announced that it would lay off 360, just under 5 percent, of its region-wide employees due to the pandemic. The Singapore-based company, which is present in eight Southeast Asian countries, said it would “be eliminating noncore projects” without elaborating further.

A week later, its rival Gojek did a headcount cut of 430 workers, around 9 percent of its total workforce, as the company aims to focus on its ride-hailing, food delivery, e-payment and logistics businesses.

Fitch Solutions projected the decacorns would gradually exit low-margin services, such as hotel and ticket booking, and put more focus on their respective financial service solutions since they have competitive advantages as early adapters of e-wallets.

“We expect Grab and Gojek to also scale back on discounts in order to become profitable, especially so as investor funding could potentially slow amidst weaker global economic activity,” researchers at Fitch Solution wrote in the note, adding that despite rapid growth, both companies were unprofitable in 2019.

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