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SoftBank-backed delivery app Rappi lays off 6% of workers

Stock MarketsJan 09, 2020 10:52PM ET
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© Reuters. FILE PHOTO: A Rappi delivery man picks up his delivery bag, from his bicycle, in Bogota

By Tatiana Bautzer and Daina Beth Solomon

SAO PAULO/MEXICO CITY (Reuters) - Latin American delivery startup Rappi said on Thursday it has laid off 6% of its workforce, less than a year after Japan's SoftBank Group (T:9984) invested nearly $1 billion in the company.

Rappi did not specify the number of jobs it is cutting. According to the Brazil Journal news outlet, Rappi employs about 5,000 people, which implies the job cuts could affect at least 300 staff.

The on-demand delivery app said its "internal leadership team" made the layoff decision. The firm's board of directors includes a SoftBank representative.

SoftBank has been facing pressure to make Rappi a success following steep losses at two of its other big investments - WeWork and Uber (N:UBER).

Rappi, which has expanded its footprint in nine countries since its founding in 2015, delivers everything from groceries and restaurant meals to medication and furniture, and has branched out into scooter rental, travel and basic banking services.

"We are in fact actively hiring a large number of people in our areas of focus for 2020," the company said in a statement, describing technology as a priority.

"We are investing heavily in our tech team, automating some roles, re-balancing areas and embracing high performers," Rappi said. It did not say how many employees it plans to recruit.

Rappi is also building up a trove of consumer and sales data from millions of users that is highly coveted by consumer brands, restaurants, supermarkets and stores.

Softbank's investment of nearly $1 billion last April made Rappi its biggest bet in Latin America, where the Japanese conglomerate plans to invest nearly $5 billion.

When asked how soon Rappi would turn in a profit, co-founder Sebastian Mejia told Reuters his priority was to grow fast, and that investors were on board with the plan.

SoftBank-backed delivery app Rappi lays off 6% of workers
 

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