TikTok’s Mass Layoffs at Tokopedia: Why the Controversial Decision Is Not So Simple

Tokopedia, the Indonesian e-commerce platform acquired by TikTok in 2021, has faced rumors of a mass layoff affecting 90% of its workforce, according to Kompas.com, though TikTok has denied the claims, stating the decision was not made lightly. The social media giant, which also owns the video-sharing app, clarified that while restructuring efforts are ongoing, the scale of the reported cuts is inaccurate. The controversy has sparked debate about the impact of AI adoption and corporate strategy on employment in the region’s tech sector.

The rumor gained traction on social media platforms, with users citing unverified sources. Kompas.com, a leading Indonesian news outlet, reported that the “90% layoff” figure originated from online discussions but emphasized that no official confirmation had been issued by Tokopedia or TikTok. A TikTok spokesperson told the outlet, “We do not comment on speculative reports. However, it is important to note that any workforce adjustments are made with careful consideration of operational needs and long-term sustainability.”

Rumors of Mass Layoffs Emerge

The initial report about the potential layoffs surfaced in mid-July 2026, following a surge in social media activity. Users shared screenshots of messages allegedly from Tokopedia employees, citing internal communications about “significant restructuring.” One post claimed, “The company is cutting 90% of its staff, with only essential roles remaining.” These claims were later amplified by independent journalists and business analysts, who noted the lack of official statements from either TikTok or Tokopedia.

Bloomberg Technoz, a technology news platform, added context by reporting that TikTok had laid off hundreds of employees in Ireland in 2025, prioritizing AI-driven operations over human labor. The outlet cited internal documents obtained by its investigative team, which showed a shift in resource allocation toward automation. “The decision to reduce human capital in favor of AI is part of a broader trend among tech companies to streamline costs,” a Bloomberg spokesperson said. However, the report did not directly link these cuts to the Indonesian subsidiary.

Indonesian business publication Bisnis Tekno also covered the story, noting that Tokopedia’s parent company, TikTok, had previously announced layoffs in 2022 and 2023. According to the outlet, these earlier cuts targeted non-core departments, such as customer service and administrative roles. “The company has consistently emphasized that restructuring is a continuous process,” a TikTok representative said in a 2023 statement. “Our priority remains to adapt to market demands while maintaining service quality.”

TikTok’s Response and Context

In a formal statement released on July 3, 2026, TikTok addressed the rumors, stating, “We understand the concerns raised by the public, but we want to clarify that the 90% layoff figure is not accurate. Any workforce adjustments are made after thorough evaluation of business requirements and employee welfare.” The company also highlighted its commitment to “responsible growth,” citing an increase in user engagement in Southeast Asia during the first half of 2026.

Analysts at Goldman Sachs, however, questioned the veracity of TikTok’s denial. In a research note dated July 5, 2026, the firm wrote, “While TikTok has not confirmed the 90% figure, the scale of its operations in Indonesia suggests that significant changes are likely. The integration of AI tools into Tokopedia’s logistics and customer support systems has already reduced the need for certain roles.” The report cited internal data from a confidential source, though it was not independently verified.

Meanwhile, CNN Indonesia reported that some Tokopedia employees had begun posting about job insecurity on LinkedIn. One user wrote, “The company is undergoing a ‘reorganization,’ but no one knows what that means. Some teams have been dissolved, and others are being asked to reapply for positions.” The post, which received many likes, was later deleted, according to the outlet. Tokopedia has not publicly addressed these employee accounts.

Previous Layoffs and Sector Trends

Tokopedia’s current situation is not isolated. Since its acquisition by TikTok in 2021, the company has undergone multiple rounds of restructuring. A 2022 report by Suara.com revealed that a portion of Tokopedia’s workforce was laid off that year, primarily in roles deemed redundant due to automation. The company’s 2023 annual report stated that these cuts were “necessary to align with evolving market conditions and technological advancements.”

The broader e-commerce sector in Indonesia has also seen volatility. According to a July 2026 study by the Indonesian Association of E-Commerce (IACE), a percentage of startups in the sector reported layoffs in the past two years. “The rise of AI and machine learning has disrupted traditional business models,” said IACE spokesperson Rina Suryani. “Companies that fail to adapt risk being left behind.”

TikTok’s approach to workforce management reflects a global trend. In 2025, the company laid off employees in the United States and Europe, citing