The restaurant delivery service, Foodpanda, backed by Rocket Internet, has given the boot to about 300 of its employees in its Indian unit operations. The numbers laid off mean that Foodpanda, which was launched in 2012 in India has sacked around 15 percent of its workforce.
It is understood that the company was indeed suffering financially for a few months now due to a host of competition from a large number of hyperlocal startups. Zomato, which transitioned itself from being a local restaurant guide to a quick delivery service provider, might have eaten into Foodpanda’s market share.
Currently, Foodpanda operates in about 200 Indian cities. It has a total of 12,000 restaurants on its platform. The company’s platform lets customers order food from these restaurants over a Smartphone app or Foodpanda’s website. The company has raised about $310 million so far from investors including Goldman Sachs. With the finances readily available, Foodpanda expanded rapidly into 40 countries after its launch in 2012. It has faced several setbacks, including accusations that Foodpanda’s focus on growth in India has outstripped its ability to manage it business properly and the sale of its Vietnam unit to Vietnammm, a competitor, earlier this month.
Foodpanda is not the only food delivery startup in India, however, to suffer from an increasingly crowded playing field. Other players such as SpoonJoy, Dazo, and Langhar have also reduced or shut down local operations.
Chief executive officer Saurabh Kochhar said,
“The year 2015 has been an active and productive one for us. Being the pioneers and leaders of this industry, we encountered situations first and had to adapt and find solutions keeping customer experience at the core. While we continued to invest in processes and technology we also had to take some difficult decisions but we believe them to be necessary steps on our path to become sustainable and profitable within the targeted timeline.”
Foodpanda India claimed in a press statement that the layoffs resulted from a more streamlined management process, which means tasks like filling in menus and making sure restaurant opening hours are correct, are now automated.