It continues to be a very rough week for e-commerce companies in Europe. In the latest development, TechCrunch has learned and confirmed that Getir — the $12 billion quick commerce upstart that grocery essentials and sundries and promises delivery of them in minutes — is cutting 14% of its staff globally. It’s been estimated that the Turkish company employs some 32,000 people in the nine markets where it operates, which would work out to 4,480 people impacted by the downsizing.
In addition to the headcount, the company plans to curtail a lot of its capital-intensive expansion — which will include hiring, marketing investments, and promotions. (Promotions in this context are not HR promotions, but the many discounts and free vouchers that quick commerce startups have been using to lure users to their platforms, at huge cost to the startups themselves.)
According to a memo that we have seen — which we are publishing below — the cuts will vary by country. (One source in Berlin estimated that the cuts in that city alone will be around 400, although this is not a number Getir would confirm.) The company has confirmed that it will not be pulling out of any specific country as part of this. Getir currently operates in its home market of Turkey, as well as the U.K., Germany, France, Italy, Spain, Netherlands, Portugal and the U.S.
This is a stark swing of the pendulum for a company that raised $768 million at an $11.8 billion valuation just two months ago.
But it’s not a surprise in the wider market context we are in at the moment, with tech companies big and small all seeing a downturn in their finances and valuations in the face of a wider cooling of the market.
Just yesterday, one of Getir’s big rivals in Europe, Gorillas, announced layoffs of 300 people and plans to explore strategic options, including sales or exits, in several European markets. Earlier in the week, Klarna — the Swedish buy now, pay later company — confirmed it would cut 10% of its workforce amid reports that it was seeking to raise money at a reduced valuation.
The world of instant grocery delivery specifically has been one that many would argue was ripe for right-sizing for a while now. Founded seven years ago, Getir was an early mover in the “instant grocery” market, but the last couple of years has seen an explosion of the category.
Covid-19 led to a change in consumer habits: in many cases stores were outright closed for periods of time, and people were less inclined to shop in person when they were open, and that led to a surge of people willing to try out shopping for groceries online for the first time. Many companies popped up, propped up by huge amounts of VC investment, to serve those consumers, and a sizable proportion of these startups were based on the premise of “instant” delivery, with items coming to your door within minutes of ordering, mimicking (or even reducing) the time it would take to quickly run to a physical store.
Even before the capital markets collapsed earlier this year, several smaller startups either shut down or got acquired — Getir being one of the consolidators, alongside other big players like Gopuff, Flink and Gorillas. That’s a trend that has continued into 2022, and there will likely be even more to come.
Companies like Klarna and Getir may be coming from different corners of the world of commerce, but they share something in common: both are backed by Sequoia. The storied VC (which led Getir’s Series C in 2021) just this week put together an alarm-bell presentation for portfolio companies, running through the state of the market today and some guidance on how to help weather the storm. The 50-slide presentation — which a source shared with us — covered topics like runway extension, fundraising in difficult markets, leadership in uncertain times, and forecasting.
Pointedly for a company like Getir — which, similar to its rivals, has been raising hundreds of millions of dollars to pump into aggressive expansion strategies involving splashy ad campaigns, extensive operations infrastructure in urban areas, and lots of promotions to bring on more consumers — one slide was titled “Growth at all costs is no longer being rewarded.”
The presentation’s message appears to have definitely hit home for Getir.
The memo follows below. We’ll update this post as we learn more, and we’re sending our best wishes to those impacted by this news.
Today is one of the most difficult days since we founded Getir, because we have to make tough decisions about our people organization that will adversely affect some of our team members.
Rising inflation and the deteriorating macroeconomic outlook around the world pushes all companies, especially in the tech industry and including Getir, to adjust to the new climate.
With a heavy heart, we today shared with our team the saddening and difficult decision to reduce the size of our global organization. At a global headquarter base, our reduction will be about 14%. Numbers will vary by country.
We do not take these decisions lightly. We will do right by every person throughout this process in line with Getir’s values of being a good and fair company. We will also decrease spending on marketing investments, promotions, and expansion.
There is no change in Getir’s plans to serve in the nine countries it operates. In these tough times, we are committed to leading the ultra-fast grocery delivery industry that we pioneered seven years ago.
This article was originally published on TechCrunch.com. Read More on their website.