News : Foodpanda Lays Off 15% of its Hong Kong Staff
Hong Kong, Feb 15, 2016 -- Start-up foodpanda laid off 15 per cent of its staff in Hong Kong on Friday as the company attempts to reboot its strategy in the city’s crowded food-delivery service market.
The dismissal of about 18 employees was confirmed to the South China Morning Post by foodpanda Hong Kong chief executive officer Alexander Roth, who said those let go were mostly from the operations side of the business, as opposed to its sales and account management departments.
Backed by Frankfurt-listed Rocket Internet, foodpanda entered the Hong Kong market in 2014. It acquired local food delivery companies Koziness and Dial a Dinner in February last year to quickly expand its local operation.
"Management announced [that they will] let go of some of us to cut cost and to ensure that the company will become more profitable," said one dismissed employee who declined to be named.
Another ex-employee said the cuts were made to boost margins for foodpanda, adding that the company was yet to turn a profit as it competes with other food-delivery companies in the market.
Roth declined to comment on foodpanda’s profitability.
"Over the last year, we have continuously optimised our processes and built tech innovations which have automated our order processing, rider and restaurant management systems," he said.
"Following the integration of Koziness and Dial a Dinner, we decided to streamline our team now to better align operational activities."
He also confirmed that an undisclosed number of employees responsible for customer care at foodpanda’s call centre were let go ahead of Friday’s layoffs.
The job cuts made by foodpanda marked the latest move by the company to stay competitive in Hong Kong amid its apparent struggles in other markets.
In December, foodpanda shut down its Vietnam operations as its financial situation deteriorated, Truong Duy Linh, the company’s ex-general director for that country, said.
Earlier this month, foodpanda sold its food delivery businesses in Brazil, Mexico, Spain and Italy to London-based rival Just Eat to focus on its core markets in Asia, the Middle East and Eastern Europe.
James Giancotti, the chief executive at start-up ratings firm Oddup, said foodpanda’s job cuts came as no surprise after London-headquartered food delivery firm Deliveroo launched in Hong Kong late last year to heat up the local competition.
Foodpanda Hong Kong launched its sister company foodora in the city last September.
Despite the layoffs, foodpanda’s online career page still listed 20 job openings for Hong Kong as of Monday afternoon, including positions in the operations department for Web content and vendor care.
Roth said foodpanda would continue to hire depending on the needs of each department, while recently investing in new delivery bikes.
"We always need people, especially people to help with delivery and related tasks," he said. "We’re investing a lot because we still see [Hong Kong] as a top-tier market of ours, and we’re growing very quickly."
Posted by Veronica Silva Cusi, news correspondent
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The foodpanda group is a global mobile food delivery marketplace headquartered in Berlin, Germany, and operating in 40 countries and territories, including India, Pakistan, Russia, Brazil, Mexico and Singapore.
Published: Wednesday, February 17, 2016