LatAm List – The Colombian delivery startup, Rappi, has announced a 6% reduction of its workforce in an attempt to cut costs and improve profitability. With a workforce of 5,000 employees, according to the Brazil Journal, these layoffs will affect around 300 employees.
Food delivery companies are coming under increased pressure as no startup has yet created a financially-viable business model.
Rappi released a statement regarding the layoffs:
“In 2020, we have decided to double down on our technology team and to focus on our user experience. In order to achieve this vision, we made the decision to reduce some areas and increase the size of others to achieve our goal for the present year and deliver an even better experience for our users.”
The e-scooter startup Lime has also announced cuts at the start of 2020 as more companies focus on profitability rather than rapid growth and market share.
Lime is laying off 14% of its employees, around 100 people, and leaving 12 markets, according to a report in Axios. The company will no longer operate in six Latin American cities where business was ‘underperforming,’ specifically, Bogota, Buenos Aires, Montevideo, Lima, Puerto Vallarta, Rio de Janeiro, and São Paulo.
“Financial independence is our goal for 2020, and we are confident that Lime will be the first next-generation mobility company to reach profitability,” said Brad Bao, CEO of Lime.
Read more about Rappi’s cost reductions here.
Read more about Lime’s pullback here.