Foodpanda verifies speak to offer part of its Asia company, layoffs

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A carrier for Foodpanda, a meal-delivery service run by Delivery Hero AG, checks his smart device while resting on a bike at the business’s operations center in Bangkok, Thailand, on Friday, March 16,2018 Bangkok’s famous love affair with food is spilling over to meal-delivery apps, a recently established sector that Foodpanda tasks will rise in 2018 as competitors magnifies. Photographer: Brent Lewin/Bloomberg by means of Getty Images

Brent Lewin|Bloomberg|Getty Images

Singapore- headquartered food shipment service Foodpanda on Friday verified to CNBC that it is performing its newest round of layoffs as the requirement to be “more agile remains critical.”

“Our company priority right now is to become leaner, more efficient and even more agile. To do this, we need to streamline our operations so we can take on a more structured approach for the coming days,” Jakob Sebastian Angele, APAC CEO of Foodpanda, stated on Thursday in a letter shown workers seen by CNBC.

He did not discuss the variety of workers affected nor departments impacted.

This is Foodpanda’s 3rd round of layoffs considering that task cuts in February and September in 2015 in the middle of macroeconomic headwinds, according to media reports. Grab and Deliveroo have actually likewise decreased headcount this year.

“While we already implemented some measures earlier this year, there is more we have to do to create the right set-up for our operations,” stated Angele.

Those steps consist of examining organizational structure throughout both local and nation groups along with moving some practical reporting lines into various leaders for more consistency and focus, stated Angele.

The layoffs come as Foodpanda moms and dad Delivery Hero remains in initial conversations with possible purchasers to offer part of its Southeast Asian food shipment company, the Berlin- based business verified with CNBC.

On Wednesday, German media outlet WirtschaftsWoche reported that Delivery Hero is offering its operations under the Foodpanda brand name 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 selected Southeast Asia markets. Any discussions or plans are in their preliminary stages,” the company informed CNBC in an e-mail, without pointing out particular markets.

The German media report likewise stated that rival Grab might be a purchaser. When CNBC connected, Grab decreased to talk about the matter.

“Grab’s competitors whether Gojek or Foodpanda are losing market share. Grab is gaining market share in deliveries from Foodpanda who might even exit few markets in due course. Foodpanda is dis-advantaged due to its stand-alone delivery model,” stated Sachin Mittal, head of telecom, media and innovation research study at DBS Bank, in aSept 21 note.

Grab is the leader in Southeast Asia’s food shipment market, holding 54% of the area’s gross merchandize worth in 2022, while Foodpanda recorded 19% and Gojek held 12%, according to a report from tech research study company Momentum Works.

Tough operating environment

Food shipment gamers are attempting to survive in the middle of financial headwinds. Grab slashed expenses in the previous couple of quarters as the company concentrated on success. Delivery Hero formerly stated that its “focus remains on our long term commitment to building a sustainable, profitable business.”

Delivery Hero has yet to end up being rewarding considering that its beginning in2011 For the very first half of 2023, Delivery Hero reported a bottom line of 832.3 million euros ($8869 million), compared to a loss of 1.495 billion euros a year prior.

Jonathan Woo, senior research study expert at Phillip Securities Research, stated that Foodpanda possibly offering Southeast Asia services is “typical market consolidation after intense competition, especially as scrutiny over profitability intensifies.”

“Only a few market players — Grab, GoTo — in Southeast Asia could buy out Foodpanda,” stated Woo, including that such an acquisition would be “most appealing to Grab” which is more established in the area compared to GoTo or Deliveroo.

GoTo is the combined business following a merger in between Indonesia’s Gojek, which runs ride-hailing and food shipment services, and e-commerce giant Tokopedia.

In December 2021, Foodpanda revealed it would reduce operations in Germany and leave the Japan market. Both Foodpanda and Grab have actually broadened to dine-in services as customers resume their everyday regimens and head out and dine in more regularly.