Melbourne food ordering start-up Mr Yum to lay off 17% of workforce

Most Australians have used the ordering platform whenever they go out to eat or drink. But the company has now had to lay off nearly one in five of its staff.

Yet another Australian start-up has joined a growing list of firms laying off staff en masse as they struggle during a “market correction”.

In a LinkedIn post from earlier this week, one of the co-founders of food ordering and payment platform Mr Yum revealed that nearly one in five staff had been let go.

The CEO Kim Teo shared the company-wide email sent to staff, revealing just 10 minutes after it landed in people’s inboxes, individuals were notified if they were set to be terminated from their roles.

About 40 employees are expected to have been impacted, representing 17 per cent of Mr Yum’s workforce.

Ms Teo shared the sad update in light of “transparency” and said to laid off staff “we are really going to miss you”.

“Before markets changed, start-ups fell into the trap of thinking revenue growth required headcount growth, and we’ve proven the opposite to be true,” Ms Teo began the sobering email.

Mr Yum went through another round of redundancies in August, dropping 17 per cent of staff at the time.

However, this has so far had a positive effect, with Mr Yum’s revenue growth increasing by 35 per cent in the months since then. The same is expected for the latest redundancy round.

Part of the email staff received in their inbox earlier this week.

Kim Teo is the CEO of Mr Yum with their headquarters in Melbourne. Picture: NCA NewsWire / David Crosling

The decision was made “with a heavy heart”, according to Ms Teo.

Redundant staff will receive six weeks’ pay on top of notice periods, accelerated stock options, career and mental health support and the option to keep their laptop.

Those unlucky workers will also be given access to free mental health support through the company for the next three months.

The entire office was given the day off this Monday as a sort of mental health day.

Three of the company’s founders flew to different parts of the world to ensure they were offering support, in Melbourne, London and Austin in Texas.

Middle managers were cut, with the email outlining that management roles were consolidated. They also said they made sure to reduce the impact on customers by instead de-prioritising low confidence projects and resizing the head counts in different regions.

Mr Yum is used by many hospitality venues, where you can order straight from the table. Picture: Rebecca Michael.

On social media, one person accused Ms Teo of “poor planning” to have to announce two lay-off rounds over just a few months.

“When we first made redundancies in August, we didn’t know that markets would be expected to stay flat for years and how important it would be to chart a path to profitability. We made the best decision we could, with the information we had at the time,” Ms Teo responded.

She also revealed that profitability was always the plan but they had to more careful given the tough market conditions ravaging the start-up sector. “This was a decision to ensure we get there with current cash reserves from previous rounds, instead of being reliant on another financing round,” she added.

Mr Yum launched in Melbourne in 2018 offering a QR code-based ordering and payments platform for customers at hospitality venues. It has styled itself as “Shopify for restaurants”.

It claims more than 5000 restaurants and hotels around the world use their tech.

In 2021, Mr Yum raised $89 million in funding.

Mr Yum had just 12 staff members before the pandemic, but exploded on the food scene in the wake of Covid-19.

The start-up and tech industry has been gutted in the past year as funding is scarce and costs blow out.

Earlier this week, Amazon announced it was making 9000 workers redundant.

Originally published as Melbourne food ordering start-up Mr Yum to lay off 17% of workforce