A courier from Foodpanda, a meal delivery service operated by Delivery Hero AG, checks his smartphone while sitting on a motorcycle at the company’s operations center in Bangkok, Thailand, Friday, March 16, 2018. The Bangkok’s famous love affair with food is spilling over to food delivery apps, a burgeoning sector that Foodpanda predicts will boom in 2018 as competition heats up. Photographer: Brent Lewin/Bloomberg via Getty Images
Brent Lewin | Bloomberg | Getty Images
Foodpanda, the Singapore-based food delivery service, confirmed to CNBC on Friday that it is making its latest round of layoffs as the need to be “more agile remains critical.”
“Our company’s priority right now is to become simpler, more efficient and even more agile. To do this, we need to streamline our operations so that we can adopt a more structured approach for the coming days,” Jakob Sebastian Angele , Foodpanda’s APAC CEO, said in a letter shared with employees seen by CNBC.
He did not mention the number of employees affected or the departments affected.
This is the third round of layoffs at Foodpanda since job cuts in February And September last year in a context of macroeconomic difficulties, according to media reports. To input And Deliveroo have also reduced their workforce this year.
“Although we already implemented some measures earlier this year, we need to do more to create the right configuration for our operations,” Angèle said.
These measures include reviewing the organizational structure of regional and national teams as well as transferring some functional reporting lines to different leaders for greater consistency and focus, Angele said.
Layoffs come as Foodpanda parent Delivery Hero is in preliminary discussions with potential buyers to sell part of its food delivery business in Southeast Asia, the Berlin-based company confirmed to CNBC.
Wednesday, a German media WirtschaftsWoche reported that Delivery Hero sells its operations under the Foodpanda brand in Singapore, Cambodia, Malaysia, Myanmar, Philippines, Thailand and Laos.
“Delivery Hero confirms negotiations with several parties regarding a potential sale of its foodpanda business in certain Southeast Asian markets. Any discussions or plans are in their preliminary stages,” the company told CNBC in an email. mail, without mentioning specific markets.
According to German media, the competitor To input could be a buyer. When contacted by CNBC, Grab declined to comment on the matter.
“Grab’s competitors, whether Gojek or Foodpanda, are losing market share. Grab is gaining market share in deliveries from Foodpanda, which may even exit a few futures markets. Foodpanda is at a disadvantage due to of its autonomous delivery model,” said Sachin Mittal, head of telecommunications, media and technology research at DBS Bank, in a September 21 note.
Grab is the leader in the Southeast Asia food delivery market, holding 54% of the region’s gross merchandise value in 2022, while Foodpanda captured 19% and Gojek held 12%, according to a report from the technology research company Momentum Works.
Food delivery players are trying to stay afloat despite economic headwinds. Take advantage of lower costs in recent quarters as the company focused on profitability. Previously Delivery Hero said that its “focus remains on our long-term commitment to building a sustainable and profitable business.”
Delivery Hero has yet to become profitable since its inception in 2011. For the first half of 2023, Delivery Hero reported a net loss of 832.3 million euros ($886.9 million), compared to a loss of 1.495 billion euros a year earlier.
Jonathan Woo, senior research analyst at Phillip Securities Research, said Foodpanda potentially selling Southeast Asia operations is “a typical market consolidation after intense competition, especially as profitability scrutiny grows.” intensifies.”
“Only a few market players – Grab, GoTo – in Southeast Asia could buy Foodpanda,” Woo said, adding that such an acquisition would be “very attractive to Grab”, which has a stronger presence in the region than GoTo or Deliveroo.
GoTo is the company resulting from a merger between Indonesian company Gojek, which operates ride-hailing and food delivery businesses, and e-commerce giant Tokopedia.
In December 2021, Foodpanda announced that it would reduce its operations in Germany and exit the Japanese market. Both Foodpanda and Grab have expanded into restaurant services as consumers return to daily activities and go out and dine more frequently.