Hospitality ordering and payment platform Mr Yum has cut a further 40 jobs, just seven months after cutting another 40 jobs – 17% of its global workforce at the time.
CEO and co-founder Kim Teo posted the email she sent to staff today on LinkedIn saying they had “made the strategic decision to become profitable with our current cash reserves and control our fate”.
The email went out overnight, 10 minutes before employees on the verge of losing their jobs were told their positions had been lifted.
Teo had just arrived in London for a week, co-founder Kerry Osborn is in Austin, Texas, and Adrian Osman remains in Melbourne.
The CEO said in the two-page email that one of the lessons learned since the latest round of layoffs is that revenue growth is unrelated to headcount.
“Before markets changed, startups fell into the trap of thinking revenue growth required headcount growth, and we have proven the opposite to be true,” she wrote.
“We’ve generated new revenue 35% faster since we reduced our team size in August, compared to the prior period.”
We haven’t hired people since then, and that has “forced us to get creative with automation,” she said, and they became “more focused on what matters” as a leaner team.
When Mr Yum cut 40 positions last August, Teo said they had “increased our headcount too quickly” and those cuts were “to lengthen our runway while capital markets remain uncertain”.
Now, with fewer people, they are “more creative and go faster when we are lean” and their engineers “can move mountains with complex problems in a matter of days/weeks” when they have “the autonomy to fully own the outcome” . said.
The management team applied four principles when deciding to cut jobs: minimal impact on customers; consolidating management roles where there is overlap; a “right size” for regions to make them individually profitable in the medium term; and to deprioritize “low confidence projects”.
Last year, the QR code startup, founded in November 2018, nearly doubled its revenue from orders by 2022 and grew its total company revenue by 2.7 times after acquiring Sprout.
Mr Yum raised $89 million in a Series A led by US VC giant Tiger Global in November 2021 – and more than $100 million in just six months that year.
Teo said the cuts have put them on track to end up in the black without raising additional capital.
“Markets will always go up and down; we are here to build a business that can withstand external conditions,” she told staff.
“Having a path to profitability gives us the ability to use outside investment to add fuel to the fire, on our terms and only when the timing is right.”
Team members who leave Mr Yum will receive six weeks of additional pay on top of their existing notice period, as well as the usual technical layoff support, such as accelerated stock options, career transition and mental health support and keeping their laptops.
They plan to reunite the team later this week “to thank those who are leaving,” while also sharing the new organizational structure and numbers on the road to profitability.
Next Monday, March 27, is a “company mental health day off.”
Startup Daily reached out to Mr Yum for comment and was referred to Teo’s post. The company’s communications manager is among those leaving.