E-Bike Startup Zoomo Cuts 8% Jobs In Second Round Of Layoffs

Australian e-bike startup Zoomo has announced that it is slashing its global workforce by an additional 8% six months after cutting 16% of jobs in the company.

Zoomo supplies electric scooters and e-bikes to the grocery delivery market, with Uber Eats, Domino's and DHL being its prominent customers. Around 27 jobs are reportedly being cut as part of the latest round of layoffs after 65 people were discharged in the previous dismissal.

"Zoomo has made the difficult decision to reduce its overall headcount by 8%. The restructure will accelerate our path to company-wide profitability in 2024," the company said in a statement accessed by Sydney Morning Herald.

The company added that the layoff "primarily affects employees in our corporate head office, as we bring central overheads in line with regional profit."

Earlier this year, the firm secured $24 million in equity funding from existing investors, including Atlassian founder Mike Cannon-Brookes' Grok Ventures and Clean Energy Finance Corporation (CEFC), with the aim of expanding core technologies and profitability, Business News Australia reported.

The company also raised $20 million in funding in February 2022 and an $80 million injection in November 2021 from prevailing investors, as per news.com.au. In total, the company has raised $116 million since its inception.

"Zoomo has an exciting opportunity to capture the massive market potential of micromobility," top executives of the company added in the statement.

Founded in 2017, Zoomo offers its e-bikes and scooters to gig workers on a weekly subscription basis as well as fleet management expertise. While the company witnessed a massive boom post-COVID-19 pandemic, potent competition from cheaper e-bike manufacturers in Asia affected the business.

Former Deliveroo executives Mina Nada and Michael Johnson instituted the company to provide e-bike services to last-mile delivery businesses. At the time, Zoomo presented itself as a subscription service for delivery riders and companies maintaining fleets of e-bikes. It currently has operations in multiple cities across North America, Australia and Europe.

The layoff announcement comes in the aftermath of the collapse of grocery delivery service Milkun, which was a major vendor for Zoomo, in April. Dany Milham, CEO of the much-hyped firm, blamed worsening economic conditions for the company's closure which resulted in more than 400 employees becoming redundant.

"I'm writing to let you know that we have made the difficult decision to wind down the business, and as a result, MilkRun will cease trading this Friday," Milham said in an email to staff, according to Financial Review. "Since we announced our structural changes in February, economic and capital market conditions have continued to deteriorate, and while the business has continued to perform well, we feel strongly that this is the right decision in the current environment."

A steep decline in the electric bike market is resulting in a downturn pattern in the sales of electric scooters in the country. Several scooter manufacturers have been failing to secure new distribution deals for the Australian market.

Meanwhile, a number of other Australian firms have made job cuts in recent months. The list has so far included tech giant Atlassian, which cut 500 jobs from its global operations last month.