The fast-track grocery service Getir is to cut about 2,500 jobs across five countries including the UK in the latest sign of waning demand in the delivery market.
The company said the job cuts, which make up more than 10% of its 23,000-member workforce, would include couriers, pickers and office employees in the UK, US, Germany, the Netherlands and its home market, Turkey.
Getir has already exited Spain, Italy and Portugal as demand for rapid deliveries of groceries in less than 20 minutes has subsided amid the cost of living crisis while costs have risen.
Fast-track specialists including Getir and Gopuff are also coming under pressure from bigger rivals Deliveroo, Uber Eats and JustEat, which have expanded into grocery delivery alongside takeaways. In the UK, Tesco, Sainsbury’s and Ocado also operate their own rapid delivery services – Whoosh, Chop Chop and Zoom.
The market has rapidly contracted since the reopening of hospitality businesses, offices and high streets after the pandemic lockdowns, prompting consolidation among a plethora of private equity-fuelled operators that sprung up to take advantage of demand for home deliveries.
Investors poured more than $14bn (£10.5bn) into the market globally over 2020 and 2021, according to analysts at PitchBook, but interest has rapidly retreated.
Last year, the value of on-demand delivery investment globally by venture capital investors dived by more than 60% to £3.8bn according to PitchBook and is on track for another fall this year.
Getir, which was founded in Turkey in 2015, bought up rival Gorillas in a $1.2bn deal in December 2022 after snapping up the UK’s Weezy a year earlier. Smaller rival Jiffy ceased deliveries last year while the US operator Gopuff bought the UK’s Fancy and Dija in 2021.
Amid rapid cost cutting, the Zapp and Gopuff now work with Deliveroo in the UK for deliveries in some areas and Getir has teamed up with JustEat.
Navina Rajan, PitchBook’s senior European private capital analyst, said: “Over the last two years we’ve seen a notable shift in both funding and the structure of the on-demand delivery market.
“Tighter financing conditions and a move towards profitability from a growth-at-all-costs mindset have been the key drivers for consolidation in the space and pressure on companies to demonstrate a path to profitability.”
Getir is thought to be attempting to raise $500m in a funding round led by existing investor Mubadala, the Abu Dhabi sovereign wealth fund, in order to continue operating.
Getir said it was reducing the size of its team with “a heavy heart” to “increase operational efficiency”.
“Decisions like these are never taken lightly. However, Getir is determined to do right by all employees affected by the process in line with its values and in full compliance with local laws. Getir is very grateful to all colleagues for their hard work, dedication, and significant contributions to the business.”
The company said it “remains fully committed to the future of the industry it pioneered eight years ago and will continue to lead it in the future”.
Source : The Guardian
