Milkrun lays off 20 per cent of staff as tough market conditions bite

Yet another Australian company has had to cut jobs, as all its rivals have already collapsed, unable to turn a profit amid tough market conditions.

Yet another Australian company has had to cut jobs as the global ‘tech wreck’ worsens amid the downturn in the economy.

One in five staff at embattled grocery delivery start-up Milkrun have been laid off and delivery hubs have also been shut down.

On Wednesday, Milkrun founder and CEO Dany Milham announced in a message to his workforce that 20 per cent of them were being let go.

“This is obviously very difficult news to deliver and receive, and I’m sorry to those of you whose roles are being impacted,” Mr Milham said, according to several different reports.

The newly unemployed were offered counselling and wellbeing services.

Sacked staff who have been at the firm for less than a year are not entitled to redundancy packages under the law, but a spokesperson said was “going beyond that” by ensuring laid off workers receive than their statutory entitlements with additional ex-gratia payments.

They said the severance pay was based on tenure.

The Milkrun app launched two years ago.

In the full note to staff, Mr Milham blamed the terminations on the difficult economic climate.

“With economic and market conditions changing rapidly, we need to get ahead of the curve and evolve the way we operate to fit the current environment and extend our runway,” he wrote.

“This means making some structural changes and some tough decisions that will unfortunately impact some of our people.

“From today we will be consolidating a number of our hubs but will be still continuing to service all our current markets.

“We will also be making some structural changes at HQ. This means we will be reducing the total number of roles across the business by around 20 per cent.”

Reports differ about the fate of casual staff, with The Sydney Morning Heraldwriting that casual workers had not been receiving shifts.

However, the AFR reported that casual staff had mostly been converted into part-time or full-time workers which decreased how much they earned per hour.

A Milkrun spokesperson said in response to the allegations: “Milkrun requires a certain proportion of the workforce to be flexible.

“Some casuals have been offered part time and full time roles and we still have a number of casuals employed as at today’s date.”

It’s unclear how many staff have been impacted but in June last year, Milkrun had over 1000 people in its workforce.

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Milkrun founder and CEO Danny Milham delivered some devastating news to staff on Wednesday.

Founded by Young Rich Lister Danny Milham, Milkrun raised $11 million for his venture before it even launched in September 2021, and attracted a record $75 million in funding the year after.

Milkrun promised to deliver groceries in under 10 minutes but in a shocking letter to customers in June last year, Mr Milham sent out an apology because delivery was taking much longer.

Last year, it emerged that Milkrun is yet to reach profitability, with Mr Milham saying the company had been losing $40 per order at one point but had improved drastically.

A Milkrun spokesperson said the model is now profitable and that it had more than a year’s worth of funds to keep the operation running.

As Milkrun’s fate hangs in the balance, one only has to look to other Australian grocery delivery ventures to know that the company has its work cut out.

In March 2022, news broke that Quicko, which promised deliveries within two hours, had gone under.

Just two months later, Send — which promised to deliver groceries in under 15 minutes — had collapsed, putting 300 jobs across Sydney and Melbourne at risk.

In July, Delivr — a Victorian food delivery company that styled itself as a rival to UberEats and Deliveroo — also folded, with 200 jobs lost.

Then, in November, fellow online grocery delivery start-up Voly appeared to abruptly shut down, leaving customers trying to place orders completely in the dark.

Liquidators later revealed that Voly had spent $13 million in just 12 months as it attempted to keep the business functioning but with no profit at all.

The same month, meal delivery company Deliveroo also collapsed into administration, leaving 15,000 delivery riders high and dry along with the thousands of restaurants that relied on them to deliver orders to customers.

Another delivery giant, DoorDash, laid off seven per cent of its workforce – which impacted 1250 jobs – in December.

Milkrun has laid off staff due to tough market conditions.

Other Australian companies outside of the delivery and grocery realm have also been sucked into the so-called “tech meltdown”.

Earlier this month, comparison website Finder.com.au laid off or restructured 15 per cent of its workforce.

An Australian social media start-up called Linktree that was recently valued at $1.78 billion sacked 17 per cent of staff from its global operations.

Then there was Australian healthcare start-up Eucalyptus that provides treatments for obesity, acne and erectile dysfunction, which fired up to 20 per cent of staff after an investment firm pulled its funding at the last minute.

Cryptocurrency exchange Swyftx sacked one in five of its staff in August while a Brisbane-based business a telecommunications and IT infrastructure company called Megaport revealed that a whopping $1.6 million was spent paying out the 10 per cent of employees who had been made redundant.

Debt collection start-up Indebted let go of 40 of its employees just before the end of the financial year, despite its valuation soaring to more than $200 million, with most of the redundancies made across sales and marketing.

The growing list of redundancies also included Australian buy now, pay later provider Brighte, that offers money for home improvements and solar power, which let go of 15 per cent of its staff in June, and another BNPL called BizPay which made 30 per cent of its workforce redundant.

Originally published as Milkrun lays off 20 per cent of staff as tough market conditions bite