Delivery Hero Slashes Jobs and Shuts Down Tech Centers
In a move to increase efficiency and reduce costs, the food delivery service Delivery Hero is chopping jobs at its Berlin headquarters and shutting down two tech centers in Taiwan and Turkey. With this latest round of layoffs, alongside the redundancies in January, the company is looking at a 13% workforce decrease in the current year, as per their announcement on Monday. Delivery Hero refrained from disclosing the exact number of jobs being axed in Berlin, where approximately 3,000 employees currently work.
Asia remains a pivotal yet tricky region for Delivery Hero. Despite the challenges, the company envisions offloading its Southeast Asia division to meet its profitability objectives. Delivery Hero plans to divest its Foodpanda brand in numerous Southeast Asian countries, having earlier announced this intention back in mid-September. On contrast, the Middle East and North Africa region is gaining significance, while Europe and South America assume a less important role.
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- Despite the job losses in Berlin, Delivery Hero is nevertheless seeking investment opportunities across various markets, especially in the growing Middle East and North Africa region, where the food delivery service anticipates potential growth in the hospitality sector.
- The decision to sell its Foodpanda brand in certain Southeast Asian countries and divest from its Southeast Asia division constitutes a key aspect of Delivery Hero's strategic decision-making, aiming for sustainable profitability, especially in the challenging yet significant Asia region.
- The booming demand for food delivery services in countries such as Turkey and Germany (where Delivery Hero is slashing jobs) makes these markets increasingly crucial for the delivery hero's operations in the trade sector, highlighting the company's global footprint in the food delivery space.
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Delivery Hero's strategic decision-making encompasses several elements. While the sources do not explicitly mention job cuts or tech center closures in Taiwan and Turkey, there are underlying trends in Delivery Hero's operations that give context to such moves:
- Market Challenges and Strategic Adjustments:
- In Korea, Delivery Hero recorded a significant drop in category share, prompting accelerated plans and strategy adjustments. This suggests that the company is proactively addressing market challenges, which might include restructuring or resource realignment.
- Global Strategy and Growth Initiatives:
- Despite the challenges in Korea, Asia's segment still demonstrated double-digit revenue growth rates, stressing the importance of the company's emphasis on Asia. Delivery Hero is continuing to focus on growing and improving its operations in the region.
- Operational Efficiencies and Cost Control:
- Delivery Hero is increasingly focusing on operational efficiencies and cost control across its divisions, aiming to achieve sustainable profitability. This aligns with the company's efforts to improve its adjusted EBITDA and operating cash flow.
- Regional Focus and Market Expansion:
- Delivery Hero is expanding its market presence and improving customer service in various regions through strategies such as subscription services and platform enhancements, thereby driving up future revenue and profitability.
- MENA Growth and IPO Impact:
- With the potential IPO of Talabat in Q4 2024, there is likely to be significant investment in MENA's market, strengthening Delivery Hero's balance sheet and boosting its revenue in the region.
