Rocket lays off staff in Ukrainian market, no cuts in other countries
In the period between December 2021 and January 2022, Rocket, a food delivery service, had a wave of layoffs. According to Rocket’s comment for DOU (the text is also at AIN.UA’s disposal), Rocket fired over 50 workers in Ukraine.
AIN.UA has its own sources in the market that informed us about what really happened.
- The Ukrainian food tech company Rocket operates in Ukraine, the Netherlands, France, Portugal, Spain, Hungary, and Cyprus. The company now has offices in Kyiv and Vinnytsia and only representatives in other cities.
- According to the Rocket press service, the company employed over 500 people, with 400 of them in Ukraine. This number does not include delivery drivers. The entire technical team — about a hundred specialists — is based in Ukraine. All these figures were up to date before the downsizing.
- According to Rocket’s PR department, due to market changes and a financing shortage, they needed to review their financial plans and look for new investments. As a result, they fired about 50 people. These were back-end and front-end specialists as well as tech workers. Forty percent of the total number of discharged workers are technical specialists.
- The Rocket representatives say that the changes affected only the Ukrainian team — there were no layoffs in the foreign offices.
- Ex-workers told DOU that Rocket had paid a full dismissal salary. Everyone who got fired received a regular wage, a dismissal pay, and even a bonus — corporate equipment. Several ex-workers confirmed to AIN.UA that they had been allowed to “take their corporate MacBook” home.
“A lack of money. The executives have reviewed the numbers and decided to let people go. Everyone got full compensation. In any case, the HRs help ex-workers find new jobs and provide recommendations,” one of the discharged specialists said.
But still, the former workers are not willing to disclose all details. “I don’t want to tell it as for now,” explained the AIN.UA source. The reason for that remains a secret. Today you can read in comments under the article on DOU that not all ex-workers got the compensation the company had declared.
Rocket states that it has met almost all its financial obligations and helped people find new jobs. “The employees have been fully paid for work done,” the company said.
“Our task is to reallocate our investments for the longest period and now focus on the quality of internal processes, implementation of innovative technologies, and operational efficiency. Today the priority for the co-founders and management is to retain the team as much as possible and fully support those specialists with whom we are ending cooperation by the time of the next stage of growth,” the company summed up.
What happened at Rocket?
The sources of AIN.UA told privately that the main reason for the shortening is the investor of Rocket. AIN.UA was the first in 2020 to release the investor’s name — Igor Rokhlin purchased 80% of the company for $5 million (the company representatives refused to confirm or deny the amount of the deal). In addition, the sources said that Mr. Rokhlin had provided additional funding for expansionary development in Ukraine and abroad. A few months ago, an editor of AIN.UA got information that Rocket could become profitable in Ukraine, but the foreign expansion and the tech team strengthening obviously led to losses.
The funding shortage happened at the end of 2021. Nobody, including the Rocket’s founders, expected the investor would decrease the financing. As a result, the team couldn’t organize the shortening process as it should be, and “now you all know the situation.” “They at Rocket can calculate unit economy, and financial results weren’t a surprise to anyone. So it is no chance someone has missed a lack of funds to pay salaries,” told another AIN.UA source that works in the same market. “The downsizing is a result of financial shortening from the investor’s side.”
“It is a lesson for all who depend on a single investor,” commented an anonymous source.
The founders insisted on total and honest compensation for all fired employees.
Recently, Rocket started to look for new investors. One of the Rocket’s ex-workers told AIN.UA that now the company has no external funding sources, so their expenses cannot exceed the income.