Australian hospitality tech startup Mr Yum has announced a significant workforce reduction, cutting approximately 17% of its staff. The company, known for its QR code ordering system, cited rapid hiring in 2021 as the reason for the layoffs. In a move to support its employees, Mr Yum will hold a company-wide mental health day for those remaining after the dismissals.
Key Takeaways
- Mr Yum is laying off 17% of its staff due to overhiring.
- Affected employees will receive six weeks’ pay and career transition support.
- A company-wide mental health day is scheduled for the remaining staff.
- The layoffs mirror recent actions by fellow Australian startup Linktree.
Layoffs Amidst Market Correction
Mr Yum co-founder Kim Teo informed employees of the decision on Monday, with dismissals set to occur on Thursday. The company, which operates in Melbourne, Sydney, London, and Los Angeles, experienced rapid growth during the COVID-19 pandemic as QR code check-in systems became widespread. However, Teo acknowledged that the company "increased our headcount too quickly" following a successful 2021.
"Every function will be impacted as we reduce roles that are no longer aligned with a more focused strategy towards our long term vision," Teo stated in a letter to employees. She expressed regret for the situation, emphasizing that the layoffs are not a reflection of the departing employees’ contributions.
Support for Departing and Remaining Staff
Employees who are laid off will receive six weeks of severance pay, "career transition support," and three months of mental healthcare. Following the dismissals, Mr Yum plans to hold a company-wide mental health day on Friday for the remaining workforce.
Industry Trends and Challenges
The situation at Mr Yum is not unique in the current tech landscape. Co-founder Adrian Osman commented on the impact of rising inflation on startups, describing the current economic climate as "uncharted territory" for many founders who did not experience the 2008 financial crisis. He noted a "market correction" where securing large funding rounds has become more challenging.
This move by Mr Yum closely follows a similar layoff at Australian social media startup Linktree, which also cut 17% of its staff two weeks prior for similar reasons. Linktree provided its departing employees with 11 weeks of pay, nearly three months of health insurance, mental health support, and gifted company Macbooks.
Evolving Workplace Culture
The approach to these layoffs highlights a potential shift in workplace culture, particularly between younger and older generations. Newer companies often prioritize work-life balance and employee mental well-being, while younger employees increasingly expect employers to support their pursuit of fulfilling work. This contrasts with more traditional views that emphasize "sucking it up" and appreciating any available job opportunity.
