Another 40 staff to go at Mr Yum as Australian startup readjusts to market downturn

Australian digital menu startup Mr Yum has announced its second round of layoffs in the space of a year, ending the employment of “approximately 40 staff” members worldwide in an attempt to steer the business towards profitability.

On Tuesday, co-founder and CEO Kim Teo told staff the “strategic decision” will help Mr Yum make the most of its existing capital runway through the “market correction” which has bruised cash-burning startups and spooked investors.

In an email to employees she re-shared on LinkedIn, Teo said profitability is a now a primary goal for the business.

“Having a path to profitability gives us optionality to use external investment to add fuel to the fire, on our terms, and only when the timing is right,” she said.

The new layoffs come seven months after the Melbourne-founded business undertook a 17% headcount reduction, representing around one in five of its staff at the time.

Mr Yum improved internal efficiency after those layoffs, Teo said, motivating the startup to think differently about its staffing numbers.

“Before markets changed, startups fell into the trap of thinking revenue growth required headcount growth, and we’ve proven the opposite to be true,” she said.

Revenue increased 35% faster after Mr Yum’s August layoffs than before, Teo claimed.

Responding to a comment about the timing of the layoffs, Teo said the company “could have gone a little harder” last year.

“When we first made redundancies in August, we didn’t know that markets would be expected to stay flat for years and how important it would be to chart a path to profitability,” she said.

While voicing her confidence in the startup’s strategy, Teo also shared some words for staff facing the cut.

“It is going to be extremely difficult to say goodbye to colleagues who have been a big part of our journey,” Teo said.

“I’m personally grateful for your contribution to our business and our customers. We are going to miss you.”

The new Mr Yum layoffs chase up Atlassian’s decision to slash 500 roles, and mega-sized headcount reductions across Meta, Amazon, and Google, as rising interest rates and fearful investor sentiments build a market appetite for profitability over pure growth.