Food delivery startup depends on part-timers after mass layoffs

November 28, 2018 15:58
Plum co-founder Desmond Clinton Cheung believes the startup can continue its food delivery service even as the firm undergoes radical restructuring. Photo: HKEJ

Plum, a Hong Kong-based online food delivery service platform, is believed to have fired almost all its full-time employees as it seeks to restructure its business amid financial difficulties.

The one-year-old startup is now said to be relying on part-time workers to sustain its operation.

Admitting to the sacking that involved about 100 full-time workers, or nearly all its staff, Plum co-founder and general manager Desmond Clinton Cheung said on Tuesday that he believes the operations will remain normal despite the redundancy, the Hong Kong Economic Journal reports.

The affected full-time employees were given the option of staying with the firm if they agree to work under an equity ownership structure, but without a fixed monthly pay, according to the executive.

Founded in November 2017, Plum is among various food delivery service platforms in Hong Kong that are targeting the working class by taking in online orders.

The platform, however, adopts a business model that is kind of different from those of its competitors such as Deliveroo and Food Panda.

It delivers food only to designated places around the city for customers to pick them up, rather than take the parcels directly to the people's doorsteps.

While the platform is said to have attracted more than 100,000 registered users, the orders being received were apparently not enough in scale to ensure profitability.

Plum says its goal is to secure over 10,000 daily orders by the end of the year.

The mass layoffs come as a surprise, given that the startup had spoken about expansion plans as recently as in mid-October.

Cheung said at that time that the company had new designated pick-up spots opened almost every month, and also claimed that the company was receiving Series A funding.

But on Tuesday, he told the media that the growth rate of his firm has slowed down, and that he now wants to adjust its size so as to build a more sustainable business model.

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