A leading Australian start-up has announced it will sack nearly one in five staff members and afterwards hold a mental health day for workers spared the axe.
Mr Yum co-founder Kim Teo announced the tech start-up will cut staff numbers ‘by approximately 17%’ after the business hired too many workers last year.
Mr Yum is a QR-code restaurant ordering system that allows customers to order from their table using their phone.
The company operates out of Melbourne, Sydney, London and Los Angeles.
Ms Teo said the company will farewell the dismissed staff on Thursday, ahead of a company-wide mental health day on Friday.
Hospitality tech start-up Mr Yum (above) will fire 17 per cent of its staff on Friday after hiring too many people in 2021
Fired employees will receive six weeks worth of pay, ‘career transition support’ and three months of mental healthcare.
‘To those of you leaving Mr Yum this week, please know this is in no way as reflection on your contributions to the company and our culture,’ Ms Teo wrote in a letter to employees.
‘Thank you for the energy and passion you’ve put into building Mr Yum, we are really sorry for letting you down.’
Ms Teo admitted the founders ‘increased our headcount too quickly’ after riding the high of a successful 2021.
Co-founder Kim Teo (pictured bottom left with cofounders Adrian Osman, Andrei Miulescu and Kerry Osborn) announced the layoff on Monday
‘Every function will be impacted as we reduce roles that are no longer aligned with a more focused strategy towards our long term vision,’ Ms Teo wrote.
‘We plan not to have to make headcount reductions again and to move forward with a more capital-efficient structure that supports our growth in all markets.’
Mr Yum took off during the Covid pandemic as QR-code check-in systems went mainstream.
In a letter to employees (above), Ms Teo said she and the other co-founders ‘are really sorry for letting (employees) down’
Ms Teo is co-founder of Mr Yum alongside Adrian Osman, Andrei Miulescu and Kerry Osborn.
Mr Osman commented on how the recent spike in inflation has affected start-ups in an article for the Australian Financial Review, where he wrote that many tech business owners haven’t faced such tough financial conditions before.
‘Many founders and managers, including myself, were not in the full swing of their career during the 2008 financial crisis – for many of us, this is uncharted territory,’ he said.
He said the changed conditions had created a ‘market correction’ that meant start-ups are having a hard time finding large funding where investors were used to be overly-keen.
The layoff is similar to that of fellow Australian startup Linktree who dismissed 17 per cent of staff two weeks ago (pictured, Linktree CEO Alex Zaccaria)
‘Sadly, a lot of start-ups won’t make it out the other side of this market correction; however, history tells us that not only will many others survive, they’ll thrive by making the most of these times,’ he said.
The news comes just two weeks after Australian social media start-up Linktree cut 17 per cent of its staff after hiring too many people in 2021.
Linktree also offered its dismissed employees support, including 11 weeks of pay, just under three months of health insurance, mental health support and free Apple laptops.
Linktree gave fired staff 11 weeks of pay, just under three months of health insurance, mental health support and free Apple laptops (pictured, Linktree office)
‘All Linktree Macbooks will be gifted alongside all purchased work from home equipment regardless of tenure with the company,’ Linktree CEO Alex Zaccaria wrote to staff.
When explaining how the company over-hired in 2021, Mr Zaccaria said: ‘I assumed the favourable economic environment would persist into 2022.’
‘Instead, conditions changed faster than expected, and those assumptions I made were wrong.’
Similar to Mr Yum, Mr Zaccaria said the company’s ‘next phase’ required ‘narrowing our focus on our long term strategy’.
A frustrated worker (above) divided young and old viewers last month by complaining about his job, showing a clear divide in work mentality between generations
The approach to lay-offs marks a significantly different work culture between younger and older generations, with new-age bosses often focusing on work-life balance and the mental health of their workers.
The change in mindset has also seen young employees demanding more from employers, arguing staff should ‘know their worth’ while traditional bosses say they should ‘know their place’.
Last month a frustrated employee ranting about how he doesn’t enjoy working divided the internet with older viewers commenting he needs to ‘suck it up’ and should ‘appreciate the opportunity to have a job’.
Younger viewers commented the employee should instead leave the job and ‘find a new one that you enjoy mate’.