Rapid grocery delivery start-ups Getir, Gorillas slash jobs
Rapid grocery delivery firms are being forced to slow down growth because of fears about a recession.
Two of the biggest instant food apps in the world, Getir, and Gorillas announced this week that they would be laying off hundreds of workers. Zapp also announced that it will be making redundancies within its U.K. staff.
Getir informed staff Wednesday that the company plans to cut its global headcount by 14%. LinkedIn reports that the Turkish firm employs over 6,000 workers worldwide.
The firm sent an email statement saying that they had shared the difficult and saddening decision with their team to shrink the global organization.
“We also plan to reduce our marketing expenditures, promotion, and expansion.
Gorillas said Tuesday it would make the “extremely difficult decision” to lay off 300 workers. It cited the necessity to achieve profitability over the long term.
Berlin-based firm is also considering a potential exit from Italy and Spain as well as Denmark, Denmark, and Belgium. This will allow it to shift its focus on more lucrative markets such the U.S., U.K, and Germany.
Gorillas explained that these are “necessary moves” to help Gorillas grow into a more successful and profitable company with a greater focus on customers. statement.
According to a Sifted reportGorillas has struggled to obtain additional financing. CNBC reached the company but they were unable to comment immediately.
Gorillas and Getir have each raised over $1.8 billion, and $1.3 billion respectively. Getir was valued at $12 billion in March. Gorillas last stood at $3 billion. Both have burnt significant sums of money. expand in the U.S.
Zapp is a grocery start-up based in London. reportsThe company is investigating the possibility of laying off as much as 10% of employees. As a result, a consultation with U.K. workers is ongoing.
The current macroeconomic environment is extremely challenging. It’s difficult to predict when the situation will improve. According to a company spokesperson, this uncertainty has seen investors decrease their risk appetite and favor profitability over growth.
“As venture-backed scale up, which will have to raise again in the future,” we need to modify our business plan to decrease costs and increase our profitability.
Zapp raises $200 million to fund its ad hoc operations January funding round. Lewis Hamilton, Formula One driver, supported the purchase.
Companies such as Getir, Gorillas and others experienced explosive growth in the wake of the coronavirus epidemic. These services, which operate from “dark shops,” promise that they will deliver the items within 10 minutes.
A wave of recent layoffs within the sector highlights an overall shift in investor sentiment in favor of high-growth tech businesses. Many have been taking steps to lower costs against the background of sharp falls in global stock prices. Klarna stated that this week it will offer buy now and pay later services. lay off about 10% of staffFollowing reports, the company wanted to raise funding in order to reduce its valuation by three-quarters.
The viability of immediate grocery delivery services has been questioned for years. These companies tend to offer generous discounts and sell basic goods at a lower price than traditional supermarkets. The future of the sector is uncertain as Covid restrictions are gradually disappearing all over the globe and the prices continue to rise.
Gopuff stated that in March it will reduce its global workforce by 3% as part of a reorganization plan.
Meanwhile, New York start-ups Fridge No More and Buyk — which both raised money from Russian investors — wound down their operations after facing issues with fundraising after Russia’s invasion of Ukraine.
Brittain Ladd, an expert in e-commerce, stated that rapid grocery delivery companies die or live based on the capital raised.
He said, “The problem is with players such as Getir or Gorillas that they’re scam companies,” and referred to platforms’ promises of 10-minute delivery times.
Getir’s CEO stated that his company had “democratized laziness.”
The consolidation of online food delivery and on-demand grocery platforms has been significant in the past year. Getir purchased Weezy (UK) and Germany’s Delivery Hero acquired Glovo. DoorDashThe acquisition of Finland’s Wolt.
Jiffy, a London-based grocery delivery service, announced earlier this month that it will stop making deliveries. Instead, it will shift its attention to in-person grocery collection in an effort to prove investors it is viable. Zapp has announced that Jiffy will resume delivery.