Online food ordering startup Foodpanda has laid off 15% of its staff across verticals, to become ‘sustainable and profitable’. Multiple publications state the number to vary between 300-500 employees. Foodpanda claims that it has reduced manual intervention and hit 98% automation rate in order processing, thus leading to cutting its workforce.
Foodpanda’s restaurant management app does order automation as well as syncing of operational hours and menu item configurations. According to its press release, the laid off foodpanda employees will be assisted in getting new jobs and provided their remunerations through a platform it has set up. Financial Express reports that Foodpanda currently has 2,200 employees including 1,200 delivery personnel. The same report adds that the company’s customer platform won’t be affected due to the layoffs.
A Mint report states that it will also stop operations in 6 cities including Kolkata, Chennai, Nagpur and Coimbatore, resulting in job cuts of delivery personnel not on its payroll. According to the report, foodpanda delivers 20% of its total orders through its last mile delivery, while the rest is outsourced to vendors picking up and delivering the food and restaurants who deliver food themselves. (Related read: Mint’s The trouble with Foodpanda)
In the statement, Saurabh Kochhar, CEO of Foodpanda India, said that although it introduced new services in 2015, it has limited its delivery services to selective restaurant partners. It rolled out last mile delivery technology in 2015, to take further control of the delivery process, and claims to have reduced the average delivery time for its users to 35 minutes. He added that its orders increased over 10 times in the year, with a major chunk of the orders coming from returning customers.
Layoffs and shut downs in the food delivery segment:
Competitor company TinyOwl had two layoffs in 2015, one in September, where around 160 people were affected, and another one affecting over 100 people in November, which subsequently led to a co-founder being taken hostage. Zomato laid off around 300 people in October and shut down its Cashless product in Dubai. In the same month, food ordering startup Dazo shut operations, likewise with SpoonJoy, which was later acquired by Grofers. Eatlo halted operations in December.
Previous Foodpanda developments:
– In November 2015, foodpanda tied up with the Indian Railway Catering and Tourism Corporation (IRCTC) to let passengers order meals from the platform. The pilot for this service was launched at the New Delhi railway station and would be extended to Mumbai, Bangalore, Pune and Chennai in the future.
– In October, Foodpanda launched a corporate account product which would let employees of companies and companies order and pay for meals in offices.
– In May 2015, Foodpanda raised $100 million in funding led by Goldman Sachs, with participation from existing investor Rocket Internet, to expand its delivery and improve overall customer experience across the 40 markets it is operational in. So far, it has raised $310 million since its launch in 2012. In February, the company took over JustEast’s India operations, and acquiredTastyKhana in November last year.