Foodpanda Conducts Another Round of Layoffs amidst Potential Business Sale

Foodpanda Conducts Another Round of Layoffs amidst Potential Business Sale

Singapore-based food delivery company Foodpanda is conducting another round of employee layoffs as it strives for increased efficiency and adaptability. The company confirmed to CNBC that it is reducing its workforce, making it the third round of layoffs in a year.

The Asian food delivery service also slashed its headcount in February and September last year, citing economic challenges. Unlike the previous job cuts that came with the number of employees to be laid off, the specific details regarding the number of affected staff and departments of the latest job cuts remain undisclosed.

Foodpanda Reduces Workforce to Streamline Operations

In an emailed statement sent to employees on September 21, Jakob Sebastian Angele, the APAC CEO of the company, said the move would help the firm streamline its operations.

“Our company’s priority right now is to become leaner, more efficient, and even more agile. To do this, we need to streamline our operations so we can take on a more structured approach in the coming days,” said Angele.

The decision to reduce its workforce is a response to the challenging economic environment in the food delivery industry. Other food delivery companies such as Grab and Deliveroo have also downsized their staff in 2023.

Foodpanda Re-evaluates Organizational Structure

Aside from staff reductions, Foodpanda is re-evaluating its organizational structure at both regional and country levels.

The company’s CEO said that while the business has taken proactive measures to streamline operations, more work has to be done to create the right set-up for our operations.

“While we have already implemented some measures earlier this year, we need to do more to create the right set-up for our operations. Those measures include reviewing organizational structures across both regional and country teams as well as shifting some functional reporting lines into different leaders for greater consistency and focus, said Angele.

In 2021, the company wound down operations in Germany and exited the Japanese market in December 2021 as part of its strategic move to improve profitability.

Delivery Hero in Discussions to Sale Part of Foodpanda

While Foodpanda strives to manage its operations, its parent firm, Delivery Hero, is reportedly in early discussions with potential buyers to sell part of the food delivery business, which has been in service for 11 years.

The Berlin-based company confirmed to CNBC that it’s in the preliminary stage of discussion with potential buyers without disclosing the units of Foodpanda’s businesses to be sold. The company also refrained from revealing the parties involved in the deal.

However, according to reports, the company’s operations in Singapore, Cambodia, Malaysia, Myanmar, the Philippines, Thailand, and Laos may be divested.

Grab to Purchase Foodpanda’s Southeast Asia Business

It is also speculated that Grab, a major competitor to Foodpanda, is a potential buyer for the company’s Southeast Asia businesses.

According to Sachin Mittal, Head of Telecom, Media, and Technology Research at DBS Bank, the company is well suited for the deal due to its market share growth in the food delivery business.

Grab has been actively implementing cost-cutting measures to enhance profitability, unlike Delivery Hero, which has not achieved profitability since its inception in 2011.

In H1 2023, the company reported a net loss of 832.3 million euros ($886.9 million), compared to 1.495 billion euros in the same period the previous year.

Read other business news on Coinspeaker.


Foodpanda Conducts Another Round of Layoffs amidst Potential Business Sale

Source link