ByteDance will lay off 450 employees in Indonesia following an agreement with Tokopedia

(Bloomberg) — ByteDance Ltd. is laying off about 450 workers at its Indonesian e-commerce unit in the first round of cuts since the TikTok store merged with local rival Tokopedia in January.

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According to people familiar with the matter, the reductions, which affect approximately 9% of the arm’s employees, will begin this month. The final number is under debate and could change as conditions change, the people said.

The cuts signal that the Chinese social media giant is revamping its Indonesian e-commerce business as it seeks to eliminate costs after merging TikTok Shop with GoTo Group’s Tokopedia in a deal valued at $1.5 billion. Indonesia is one of the earliest markets for ByteDance’s e-commerce ambitions – and the largest so far – but competition is intense against rivals such as Sea Ltd.’s Shopee and Alibaba Group Holding Ltd.’s Lazada.

ByteDance is reducing staff across e-commerce teams, including advertising and operations, in part to eliminate duplication of functions, according to the people, who asked not to be identified because the discussions have not been made public. Following the merger of TikTok Shop and Tokopedia, Indonesian e-commerce company ByteDance employs around 5,000 people.

A ByteDance representative declined to comment.

The unusual pact, which saw GoTo become a passive sponsor of the combined e-commerce operation, allowed ByteDance to restart its Indonesian operations and comply with regulations introduced to halt online retail services. Indonesia was the first to introduce laws aimed at protecting local e-commerce services and small businesses from harm from larger, foreign companies.

ByteDance has joined Chinese tech leaders from Alibaba to Tencent Holdings Ltd. in streamlining enterprise operations and boosting profits during the economic slowdown, with the companies collectively shedding at least tens of thousands of jobs over the past two years. ByteDance’s TikTok, which faces a divestment or ban law in the U.S., also laid off hundreds of workers across its marketing and operations teams around the world last month, according to people familiar with the matter, as part of a larger overhaul by its Chinese owner.