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Running a business has its own challenges and obstacles that companies need to face in order to become sustainable and profitable. It is indeed not an easy feat, and requires carefully weighted decisions, and also a bit of luck on the side. The same goes with running a startup, which has similar hurdles.

In the case of SaleStock Indonesia and Berrybenka, which recently laid off several of its employees, there was a clear reason behind the decision: That there are things more urgent for businesses to maintain, which force them to let go their employees.

In terms of business operations, laying off employees is not an uncommon thing, especially in the case of startups. But the decision to lay off a considerable number of staffer workers (40 people for Berrybenka and 200 for SaleStock) leaves plenty of unanswered questions. What is actually happening to those two startups?

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We can conclude that everything is actually alright with these two businesses; they have not reached the stage of bankruptcy. It is simply a matter of re-arranging priorities. SaleStock, despite laying off hundreds of its employees, continues on hiring for developer positions.

There are many things that we can learn from that. First is that they are still unable to secure follow-up funding, leading them to prioritise on certain resources and decrease their burn rate. Second is that the investors are likely to have pushed them to become more profitable, for example by using in-house customer service or by developing a private label that might optimise margin. With an operational budget set from the beginning, though they might feel reluctant about it, there is a number of employees with certain skillset that has to be “sacrificed.”

Berrybenka has not announced any new job vacancies. There are only some openings for marketing internship and quality control leader, but by announcing vacancies for developers SaleStock indicates its focus on innovation.

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What happened to the two startups serve as a lesson for others. There has to be a carefully calculated allocation of fund as a growing startup needs to prevent overspending.

If a startup has started to let go of its engineers, it means they have stopped innovating or are on the brink of death.

The article Pelajaran yang Bisa Diambil dari Kasus Pengurangan Karyawan di Berrybenka dan Sale Stock Indonesia was written by Prayogo Ryza, with contribution by Amir Karimuddin, and was first published on DailySocial. English translation by e27.

The views expressed here are of the author’s, and e27 may not necessarily subscribe to them. e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested in sharing your point of view, submit your article here.

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