SINGAPORE – Regional food delivery provider foodpanda laid off an undisclosed number of Asia-Pacific staff on Friday, as it continues to face pressure to streamline its operations despite at least two previous rounds of layoffs in the past year.
“In the coming days and weeks, our focus is on supporting impacted colleagues through this difficult time,” a foodpanda spokesperson said in response to queries from The Straits Times.
The spokesperson declined to disclose how many workers in Singapore or in the Asia-Pacific region were affected, saying only: “We are extremely sorry to colleagues who are leaving us and are grateful for their contributions to foodpanda.”
The company had cut staff in September 2022 and in February 2023.
In an e-mail memo seen by ST, foodpanda chief executive Jakob Angele said that the company’s current priority is to “become leaner, more efficient and even more agile”.
Mr Angele, who took on his current role in 2017, also outlined the support for the affected staff, which he said are at least on a par with, or above, market standards.
The staff each received a severance package that is based on length of service or is aligned with the countries’ statutory guidelines, or both, and garden leave with full pay and benefits.
Other forms of support included extended medical insurance, career advisory services, encashment of any unused and accrued annual leave, as well as a waiver of the minimum period of time for the vesting of stock options.
According to an advisory on managing excess manpower and responsible retrenchment jointly released by the Government, employers and unions, the prevailing norm for retrenchment benefits is a payment of between two weeks’ and one month’s salary for each year of service.
The latest round of layoffs takes place soon after foodpanda’s parent firm, Berlin-headquartered Delivery Hero, confirmed plans to sell its foodpanda business in Singapore, Cambodia, Laos, Malaysia, the Philippines and Thailand.
Ride-hailing and delivery giant Grab is reportedly interested, and could pay over €1 billion (S$1.45 billion) for the purchase, according to German business magazine Wirtschaftswoche on Wednesday.
The potential sale comes amid a year-on-year decline in the revenue share contributed by Delivery Hero’s business in Asia in the second quarter of 2023, as the firm scaled back investments in the region in a push for profit.
Delivery Hero has said that it reached a positive adjusted earnings before interest, taxes, depreciation and amortisation for the first half of 2023, after a loss of €323 million recorded in the same period a year earlier. It did not quantify its earnings.
In his memo, Mr Angele said foodpanda is carefully reviewing its organisational structure across both regional and country teams for clearer decision-making, reshuffling the leaders staff report to and consolidating selected functions into a main regional team.
Data platform Measurable AI estimated in May 2022 that foodpanda accounts for 35 per cent of the food delivery platform market in Singapore, compared with Grab’s 56 per cent.
The firm said in July 2022 that it had 1,200 staff in Singapore.
It is unclear how foodpanda’s delivery partners will be affected by the latest developments, including the potential sale of the Singapore operations.
Labour MP Yeo Wan Ling, adviser to the National Delivery Champions Association which represents delivery workers, told ST that the delivery and driver platform industry seems to be headed for more consolidation, which leaves the self-employed people who rely on such platforms for income – in some cases their only source of income – in a vulnerable position.
They are not salaried employees and do not get retrenchment benefits if a platform stops operating, she said.
