Business

Rappi is laying off hundreds of employees in Latin America

The on-demand delivery startup claims that will focus on technology and user experience teams

The on-demand delivery app Rappi is laying off 6% of its workforce in Latin America. Photo: Antonio Salaverry/ Shutterstock

The Colombian super app Rappi, valued at $3.5 billion and backed by the Japanese conglomerate Softbank, is laying off around 300 employees in Latin America, something that represents 6% of the total workforce of the startup.

“In 2020 we have decided to double down on our technology team and to focus on our user experience. In order to achieve this vision, we made the decision to reduce some areas and increase the size of others to achieve our goal for the present year and deliver an even better experience for our users. In total, the number of people who were impacted by the decision across [Latin America] was about 6% of the people in the company. This decision is not a reflection of our growth plans, and we are in fact actively hiring a large number of people in our areas of focus for 2020.” said a spokesperson of the company to LABS.

Focused mainly on junior positions, there were about 150 layoffs in Brazil only, and the cuts come in a moment when Rappi is going through changes in some key roles such as the CEO position in Brazil, which will be assumed by Sérgio Saraiva, from Brazilian cardholder Cielo, as well as Ana Paula Bogus, former VP on Kimberly-Clark, that became general manager for the São Paulo operation, that represents more than 50% of Rappi’s revenues. 

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“Softbank is one of our most important investors and they are involved in the decision as part of our board. However, this decision was made by our in-house team of leaders as part of our plan to reach our growth goal as a company and deliver new products by 2020.” In operation since 2015, Rappi has raised $1 billion from Softbank last April – the biggest bet of the Japanese firm in a Latin American startup – but so far, it still doesn’t make profits, focusing on an ambitious growth all over the region.

“Brazil is one of our most important markets in Latin America and our plans for the country will be a game-changer for the application industry, not just in Brazil, but throughout Latin America. We have ambitious plans for the company in Brazil and we are optimistic about the company’s business plans for 2020.” concluded the spokesperson in the statement.