(Bloomberg) -- Indonesian internet company GoTo Group is replacing its chief executive officer, seeking fresh leadership to reverse years of losses and tackle intensifying competition.
Andre Soelistyo, who helped build the company over the past eight years, will step down and be replaced by Patrick Walujo, managing partner of private equity firm Northstar Group. Northstar is one of the earliest investors in ride-hailing pioneer Gojek, which later merged with local e-commerce provider Tokopedia to form GoTo. Walujo, 47, has most recently been serving as a commissioner of GoTo. Shares of GoTo climbed 7.8% in Jakarta.
Soelistyo, 39, helped carry out the merger that created Indonesia’s biggest internet company. Since its initial public offering in April 2022, though, GoTo’s shares have fallen more than 60% as tight competition has kept Southeast Asia’s ride-hailing, delivery and fintech contenders in the red.
Under Soelistyo, GoTo has narrowed losses steadily by cutting jobs, curbing promotional spending and tightening expense controls. Like its Southeast Asian peers Grab Holdings Ltd. and Sea Ltd., GoTo is trying to convince investors of its profit-making potential. Following years of rapid growth, the company has turned its focus on the bottom line, though uncertainty persists about elevated inflation and the global economic outlook.
“Investors are getting impatient, and the days of burning money and focusing on revenues are over,” said Mak Yuen Teen, a professor at the National University of Singapore who researches corporate governance. Walujo stepping in probably means “more cost cuts and a further acceleration of profitability goals.”
Soelistyo joined the company as president in 2015 and helped with its fundraising efforts leading to its IPO. He will now become a commissioner, and advise GoTo in that supervisory role, the company said.
“As a historically founder-led organization, GoTo has always prioritized the development of leaders, so we can move beyond founders towards long-term professionalization,” Soelistyo said in a statement.
New CEO Walujo will be supported by Gojek veteran Thomas Husted, who will assume the role of chief operating officer. Husted was Gojek’s finance chief from 2017 to 2021 and played a critical role in the combination of Gojek and Tokopedia, according to the company.
GoTo cut 600 roles from its workforce in March, adding to the 1,300 jobs it axed in 2022. The company said the cuts helped it reduce monthly fixed expenses by about 20% in January and February and it has also slashed marketing spending. In February, it brought forward its target for making profits by a year, expecting adjusted Ebitda to turn positive in the fourth quarter of 2023.
Indonesia Tech Giant Accelerates Profit Goal After Job Cuts
Even as the challenging economic outlook threatens to leave consumers with less to spend on shopping, entertainment, food delivery and ride-hailing, GoTo and its internet peers are betting on online services gaining ground. Singapore’s Sea reported its first-ever profit in the fourth quarter of last year, which came earlier than expected and marked a significant turning point for the company.
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