Turkish decacorn Getir to slash nearly 4,500 jobs globally
The Turkish rapid grocery delivery startup Getir is said to be planning to cut 14% of its staff globally in the near term, amid soaring global inflation and costs.
The plans come just over two months after Getir became Europe’s first grocery delivery decacorn – a term for startups that pass the $10 billion mark.
It closed a $768 million (TL 12.53 billion) funding round in mid-March, valuing the company at around $12 billion, with the participation of Abu Dhabi Growth Fund (ADG), Alpha Wave Global, Sequoia Capital and Tiger Global
The decision to cut jobs was made due to rising global inflation and costs, a source with the knowledge of the matter told Reuters.
The company is estimated to employ some 32,000 people in the nine markets where it operates, meaning that the downsizing could affect approximately 4,480 people, the U.S.-based tech- and startup-focused online newspaper TechCrunch reported.
Istanbul-based Getir operates in around 50 cities across seven European countries, the United States as well as all major cities in its home country.
Its markets in Europe include the U.K., Germany, France, Italy, Spain, Netherlands and Portugal.
Job cuts will vary by country, TechCrunch said, citing a memo. In Berlin alone, cuts could be around 400, TechCrunch suggested, citing a source.
The company has confirmed it will not be pulling out of any country.
Founded in 2015, Getir invented the category of 10-minute deliveries for customers who order through its smartphone app, with riders fanning out from neighborhood warehouses that stock essential groceries.
The company offers a selection of 1,500 everyday items to its customers.
With investor interest in the nascent industry peaking, the company ventured out of Turkey in January to launch its rapid “last mile” goods delivery service in Britain.
It is said to have reached a network of over 1,100 stores, delivering almost 1 million orders daily, while its mobile app has neared 40 million downloads across nine countries.
Peers to cut too
The model for rapid grocery deliveries comes with high costs as the companies have to pay for thousands of riders and logistic centers across cities to get chips, milk, pasta and other items to customers swiftly.
Getir’s plan comes just two days after one of its biggest peers in Europe announced similar measures.
German grocery delivery app Gorillas on Tuesday said it will lay off 300 people, cutting its administrative staff in half, as it shifts focus from rapid expansion to turning a profit.
The Berlin-based startup, founded in 2020, has tripled the size of its business since October when it raised 860 million euros ($921 million) but it has not been profitable amid an uncertain economic outlook.
“Risk has become irritating for investors, and nobody wants uncertainty right now. That makes it pretty hard to raise money right now,” Gorillas Chief Executive Kagan Sumer told Reuters in an interview. “When we go public, we want to do it as a profitable company.”
“That’s why fixed costs have to come down and the Berlin headquarters should become the hub,” Sumer said, adding that the company was only laying off administrative staff and its 14,000 bicycle-bound deliverers would not be affected.
He said Gorillas aimed to focus on Germany, France, Britain, the Netherlands and the U.S., which make up 90% of the startup’s business, and it was reviewing options for its smaller operations in Italy, Spain, Denmark and Belgium.
Gorillas, whose investors include online takeaway food firm Delivery Hero, had in the past aimed to expand into more countries amid hopes the business model would grow as much as meal delivery did in COVID-19 lockdowns.
But competition has been fierce in major cities, such as Berlin, with rivals such as Flink, Doordash’s Wolt and Getir offering similar services.