In a bid to remain competitive, foodpanda has purportedly retrenched 5% of its 1,200 staff in Singapore.
That’s around 60 employees, mathematically speaking.
In response to media enquiries, the foodpanda spokesperson said that its German parent company, Delivery Hero, was aiming to become Earnings Before Interest Depreciation and Amortisation (EBITDA) positive.
Being EBITDA-positive is a good indicator that the company is profitable at an operating level, or that it is selling its product higher than cost to make.
Therefore, there is a “critical need” to reduce costs and increase the profit to stay competitive.
According to annual reports, Delivery Hero’s EBITDA losses reached US$888.8 million in 2021.
While the number looks nice, that was S$1.25 billion in losses that the company had to contend with.
Fortunately, the company has managed to hit the breakeven point n the second quarter of this year.
Although the retrenchment isn’t a huge source of alarm, it has to be said that foodpanda just made Singapore its regional headquarter and global tech hub with an office in Robinson Road this July.
Furthermore, when foodpanda was asked about the number of people laid off in Singapore, alongside their roles and demographic, the company did not respond.
The news of the retrenchment first surfaced on DealStreetAsia on 2 September.
Reportedly, the Singapore branch won’t be the only one going through layoffs; in the Philippines around 150 people of 20% of its staff will be axed, and Thailand will be experiencing job cuts too.
foodpanda is still hiring employees for marketing and media on LinkedIn though, so the retrenchment probably doesn’t involve these two departments. Their internship offers are still open.
The company stated that it was a “painful decision” to reduce team numbers, and that it is helping affected employees through this transition, via their employee assistance programmes and extended insurances and benefits.
The spokesperson also apologised for disappointing the affected employees on the company’s behalf, before thanking them for their contributions and dedication to the food delivery company.
Based on the current statistics, foodpanda holds 37% of the market share in the food delivery sector and had more than 10,000 delivery workers on its platform at the beginning of last year.
Meanwhile, Grab has more than 50% of the market share.
Featured Image: Tham KC / Shutterstock.com
