Digital menu and restaurant ordering startup Mr Yum will lay off nearly one in five workers, becoming the latest Australian firm to slash its headcount as market expectations dim.
Taking to LinkedIn on Monday evening, co-founder Kim Teo shared an email sent to staff detailing the “hardest decision we’ve made in Mr Yum’s journey”.
“After deeply exploring every option available, we have made the decision to reduce the Mr Yum team by approximately 17% to extend our runway while capital markets remain uncertain,” Teo said.
Mr Yum counted a global team of 260 employees in May after acquiring MyGuestList, suggesting the layoffs will affect around 44 people at the company.
The decision was borne of changing market sentiment in 2022, Teo said.
Unlike the heady days of late 2021, in which Mr Yum raised its $89 million Series A round, rising inflation is now compressing economic growth projections and deterring big-name funds from massive investment pledges.
“We completely accept and own that we increased our headcount too quickly,” Teo said.
“We made an assumption that the strong economic environment would continue deeper into 2022; instead, conditions deteriorated rapidly in May, back when we first communicated the situation with you, and capital markets have remained soft since.”
The announcement comes just days after Mr Yum was selected for the Victorian Government’s 30×30 program, designed to propel local startups to billion-dollar valuations by the end of the decade.
Teo said Mr Yum intended the headcount reduction to be the company’s last as it seeks continual growth in the Australian and overseas markets.
Impacted employees will be granted six weeks of severance on top of their notice periods, “accelerated” stock option vesting tied to Mr Yum’s next corporate milestone, and extended access to Mr Yum’s mental health support services.
Workers laid off from the company will also face “career transition support” from Mr Yum, Teo said.
Such support is expected to include CV and interview advice, coaching, and introductions to employers who may be interested in taking on former Mr Yum staff.
The company may soon follow in the footsteps of Australian companies like Linktree, which last week publicly shared a spreadsheet featuring the names and contact details of the 38 employees employees impacted by its own redundancy round.
In doing so, Linktree emulated Swedish buy now, pay later player Klarna, whose CEO made headlines in June by sharing a spreadsheet of recently laid-off employee details.
Companies interested in hiring Mr Yum staff impacted by the decision can also contact the company directly.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
