Half of the administration dismissed: Gorillas steps on the brakes on costs

First it was about expansion.

Half of the administration dismissed: Gorillas steps on the brakes on costs

First it was about expansion. But now Gorillas has set itself a different goal: to be in the black. The food start-up is laying off half of the administration employees. The reason: "No one wants uncertainty at the moment," says company boss Sümer.

The fast food delivery service Gorillas pulls the ripcord because of skyrocketing costs and lays off 300 employees in administration and thus half of the employees working there. In addition, all strategic options for business in Italy, Spain, Denmark and Belgium are being examined, the Berlin startup, which was founded just two years ago, announced.

What exactly that means was left open by company boss Kagan Sümer in an interview with Reuters. "Since October, we have tripled our business and increased efficiency ninefold. But looking at the capital markets at the moment, we have to take further steps to pave the way to profitability," said Sümer. In the meantime, rapid growth is no longer his top priority, but the goal of getting into the black: "That's the next milestone. When we go public, we want to do it as a profitable company."

In October, Gorillas collected around 860 million euros from investors in a financing round and was valued at 2.5 billion euros - similar to its competitor Flink, also from Berlin, but significantly less than Getir from Turkey. At that time, the global food delivery service Delivery Hero came on board as an investor with a capital injection of 200 million euros.

It is unclear how long the money will last, given the high expenses, to secure operations. Sümer said: "We are here to stay. We have enough buffers." But he is also certain: "Risk has become irritating for investors and nobody wants uncertainty at the moment. That makes it quite difficult to collect money at the moment." That's why the fixed costs have to go down and the Berlin headquarters should become the linchpin. The 300 employees who are now being laid off work exclusively in administration. The approximately 14,000 drivers are not affected.

For a long time, the aim was to expand into more countries and win as many customers as possible, who would order as many supermarket items as possible via the app and have them delivered to their home from the gorillas' mini-warehouses within a very short time. However, the competition is fierce and in cities like Berlin, Flink, the Doordash subsidiary Wolt and Getir also offer similar services. Now Gorillas wants to focus on Germany, France, Great Britain, the Netherlands and the USA in order to save costs. According to Sümer, these countries currently account for around 90 percent of the business.

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