It remains a very tough week for e-commerce companies in Europe. In the latest development, gotechbusiness.com has learned and confirmed that: getir † the $12 billion fast commerce upstart that offers groceries and sundries and promises to deliver them in minutes – cutting 14% of its workforce worldwide. It has been estimated that the Turkish company employs about 32,000 people in the nine markets where it operates, which would equate to 4,480 people affected by the downsizing.
In addition to headcount, the company plans to curtail much of its capital-intensive expansion, including 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 used to lure users to their platforms, on huge costs for the startups themselves†
According to a memo we’ve seen – which we’ll publish below – the cuts will vary by country. (A source in Berlin estimated that the cuts in that city alone will be around 400, although this is not a number that Getir would confirm.) The company has confirmed that it will not pull out of any specific country as part of this. Getir is currently active in its home market Turkey, as well as in the UK, Germany, France, Italy, Spain, the Netherlands, Portugal and the US
This is a strong swing of the pendulum for a company that raised $768 million just two months ago at a valuation of $11.8 billion.
But it’s no surprise in the broader market context we’re in right now, with technology companies big and small all seeing a downturn in their finances and valuations in the face of a broader market cooling.
Yesterday, one of Getir’s major rivals in Europe, Gorillas, announced layoffs of 300 people and plans to explore strategic options, including sales or exits, in several European markets. Earlier this week, Klarna, the Swedish company that buys now and pays later, confirmed it would cut 10% of its workforce after reports it wanted to raise money at a lower valuation.
The world of instant grocery delivery is one that many would argue has been ripe for size for a while. Founded seven years ago, Getir was an early mover in the instant grocery market, but the last few years have seen an explosion of the category.
COVID-19 led to a change in consumer habits: In many cases, stores were closed for a period of time and people were less likely to shop in person when they were open, leading to a wave of people willing to shop for the do your shopping online first. Many companies sprung up, backed by massive amounts of VC investment, to serve those consumers, and a significant portion of these startups were based on the premise of “immediate” delivery, with items arriving at your door within minutes of ordering. , mimicking (or even reducing) the time it takes to quickly run to a brick-and-mortar store.
Even before the capital markets collapsed earlier this year, several smaller startups closed or were acquired. Getir was one of the consolidators, alongside other big players such as Gopuff, Flink and Gorillas. That is a trend that has continued into 2022 and more are likely to follow.
Companies like Klarna and Getir may come from different corners of the trading world, but they have something in common: both are backed by Sequoia. The legendary VC (who led Getir’s Series C in 2021) this week put together an alarm bell presentation for portfolio companies, which reviews the current market situation and provides some guidance on how to weather the storm. The 50 slide presentation – which a source shared with us – covered topics such as job renewal, fundraising in difficult markets, leadership in uncertain times and forecasting.
Notably, for a company like Getir — which, like its rivals, has raised hundreds of millions of dollars to pump into aggressive expansion strategies with splashy ad campaigns, extensive operational infrastructure in urban areas, and plenty of promotions to attract more consumers — a slide was titled “Growth at all costs is no longer rewarded.”
The message of the presentation certainly seems to have reached Getir.
The memo follows below. We will update this post as we learn more, and we send our best wishes to those affected by this news.
Today is one of the hardest days since we founded Getir, as we have to make tough decisions about our people organization that will have adverse effects on some of our team members.
Rising inflation and deteriorating macroeconomic prospects around the world are forcing all companies, especially in the tech industry and including Getir, to adapt to the new environment.
It is with a heavy heart that we shared with our team today the saddening and difficult decision to reduce the size of our global organization. On a global headquarters basis, our reduction will be approximately 14%. The numbers will vary by country.
We don’t take these decisions lightly. We will do good to everyone in this process in accordance with Getir’s values of being a good and honest company. We will also reduce spending on marketing investments, promotions and expansion.
There is no change in Getir’s plans to serve in the nine countries where it operates. In these challenging times, we are committed to leading the way in the ultra-fast delivery industry that we pioneered seven years ago.