RIO DE JANEIRO, BRAZIL – Rappi, owner of the well-known delivery App, will dismiss six percent of its employees in Latin America as part of a restructuring plan to focus on technology and user experience divisions. Some 150 employees will be laid off in Brazil, where iFood has been competing for customers and restaurants in recent months.
According to rumors, Rappi will make 150 layoffs in Brazil, concentrated in more junior positions. The company does not confirm this number, stating only that “it has decided to reduce some areas and expand others”. It has about 5,000 employees spread throughout Latin America.
“Rappi decided to invest in its technology team and user experience,” the company said in a statement. “This decision does not affect our growth plans, we are in fact hiring a large number of employees for Rappi’s focus areas for 2020”.
iFood has deepened the competition with Rappi in recent months, according to Brazil Journal, leading to a reduction in profit margins and making it difficult to obtain and retain customers – both users and restaurants.
Users say that they have not ordered deliveries by Rappi for several months. In their order history, several restaurants now show up with the “unavailable” notice – they have left the platform. And iFood prices are said to be more competitive. There are promotions, combos, and coupons available within the App.
Also, Rappi’s interface can be slow and confusing because the App seeks to offer a wide range of services: restaurant, pharmacy, and supermarket delivery, unlocking Yellow scooters and package transport (just like Loggi). It will be good news if the company really focuses on the user experience.
Rappi is valued at US$ 2.5 billion
Last year, the Japanese conglomerate Softbank led a US$1 (R$4) billion investment round in Rappi. The delivery company was valued at US$2.5 billion and now needs to prove its worth. It has not yet made a profit in its five years of existence.
Executives tell Reuters that in order to achieve profitability, Rappi is collecting purchasing trends from its customers to resell them to food brands, restaurants, supermarkets and stores.
Luis Techera, the company’s executive in Mexico, gives an example: “If Gillette wanted to launch a new razor, 100,000 customers selected based on age and location could receive free samples. “Rappi can deliver them in a week to all users who have already bought a Gillette razor and that’s an advantage nobody else has,” Techera says.
Rappi is an on-demand delivery startup headquartered in Bogotá, Colombia and operating in Colombia, Argentina, Brazil, Chile, Ecuador, Mexico, Peru, and Uruguay.