Hospitality ordering and payments platform Mr Yum has cut another 40 jobs, just seven months after shedding 40 more jobs – 17% of its then global workforce.
CEO and cofounder Kim Teo posted the email she sent to staff today on LinkedIn saying they’d made “the strategic decision to get to profitability with our current cash reserves and control our destiny”.
The email went out overnight, 10 minutes before the staff about to lose their jobs were told their positions had been abolished.
Teo had just arrived in London for the week, with cofounders Kerry Osborn is in Austin, Texas, andAdrian Osman remaining in Melbourne.
The CEO said in the two-page email that among the lessons learned since the last round of redundancies is revenue growth is not connected to headcount.
“Before markets changed, startups fell into the trap of thinking revenue growth required headcount growth, and we’ve proven the opposite to be true,” she wrote
“We grew new revenue 35% faster since reducing the size of our team in August, compared to the same timeframe prior.”
Not hiring since has “forced us to be creative with automation”, she said, and they became “more focussed on what mattered” as a leaner team.
Last August when Mr Yum cut 40 roles Teo said they had “increased our headcount too quickly” and those cuts were “to extend our runway while capital markets remain uncertain”.
Now, with fewer people, they are “more creative and move 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 completely own the outcome” she said.
They management team applied four principles to the decision to job cut: minimising impact on customers; consolidating management roles where there is overlap; a “right-size” for regions to get them individually to profitability over the medium term; and to de-prioritise “low confidence projects”.
Last year the QR-code startup, founded in November 2018, nearly doubled its ordering revenue in 2022 and grew overall company revenue by 2.7 times following the Sprout acquisition.
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 set them on a path to being in the black without taking on additional capital.
“Markets will always go up and down; we’re here to build a company that’s resilient to external conditions,” she told staff.
“Having a path to profitability gives us optionality to use external investment to add fuel to the fire, on our terms, and only when the timing is right.”
Team members leaving Mr Yum will receive an additional six weeks of pay on top of their existing notice period, as well as the usual support of tech redundancies, such as accelerated stock options, career transition and mental health support and keeping their laptop.
They plan to gather the team later this week “to say thank you to those who are leaving” while also sharing the new organisational structure and numbers on the path to profitability.
Next Monday, March 27, will be an “all-company mental health day off”.
Startup Daily contacted Mr Yum for comment and was referred to Teo’s post. The company’s communications manager is one of those leaving.
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