The firm has been going through a bad patch of late, following allegations of financial irregularities and corporate misgovernance
Amidst the tough market conditions for foodtech startups in India, Rocket Internet-owned online food ordering platform foodpanda has handed pink slips to almost 15 per cent — 330 employees — of its total workforce of around 2,200, according to a report by Gadgets360.
foodpanda has managed to achieve a 98 per cent automation rate in order processing, prompting it to lay off people en masse, added the report, quoting a company spokesperson.
The layoff will be effected across a few departments. The affected staffers will receive due remuneration, in addition to assistance to discover other opportunities.
The development comes close on the heels of various allegations of misappropriations against the company, ranging from financial irregularities to corporate misgovernance.
In September, Indian media reported that the company had listed fake restaurants (which are either non-existent or already shut down) on its platform, paid salaries to non-existent staff, and had not paid partner restaurants’ dues even after being chased for so many months.
A former executive at foodpanda was quoted to have told the publication that of the 12,000 restaurants listed on its platform, there were not more than 2,000 that actually generate most of the business.
The report had even exposed various corporate governance issues at the company that included paying salaries to over 100 non-existent employees. An official was quoted to have said that foodpanda had been paying big salaries to around 200-odd people.
Shachin Bharadwaj, Co-founder of TastyKhana (an online food order startup that foodpanda acquired last year and merged with in March 2015) had left the firm due to the lack of processes at the company.
He had uncovered discrepancies such as fake orders, fake restaurants, no automation, over-dependence on open Excel sheets, which were prone to manipulation and suspicion over contracts awarded to vendors.
Of late, the foodtech industry in India has been undergoing several changes. Many startups are now facing financial pressure, which has led them to cut costs, modify business plans, halt expansion or reduce their staff count.
Some have even had to shut shop. A sense of caution has dawned on the investors and the industry that is still trying to find its feet and lucrative revenue streams.
Recently, Mumbai-based TinyOwl and restaurant listing-cum-food-ordering platform Zomato fired people in large numbers as part of restructuring of the business.
Launched in 2012, Gurgaon-based foodpanda is present in 200 cities. Globally, the company operates in over 40 countries and partners with around 45,000 restaurants.
The company has acquired many companies in the past, including Donesi.com (which has operations in Serbia, Montenegro, Bosnia and Herzegovina), Pauza.hr (Croatia), NetPincer (Hungary), Just Eat (India) and TastyKhana (India).
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