Honestbee retrenches 80% of staff following Habitat’s temporary closure

Struggling online food and grocery delivery startup Honestbee has retrenched about 80% of its staff, or roughly 100 of its 130-strong team, following the temporary shut down of its supermarket Habitat.

The company also told its staff that payment of their salaries and contributions for February will be delayed until it acquires further funding, The Straits Times reported.

Photo credit: Honestbee

In an emailed statement, a spokesperson for Honestbee told Tech in Asia that the company the company made the decision due to “several external commercial pressures” that led to Habitat’s temporary closure. “The company has decided to reduce its non-core staff as it does not foresee operating Habitat at its full strength over the next few weeks.”

Most of those affected were Habitat’s operational staff in culinary, service, retail, and warehousing, the spokesperson added.

In February, Honestbee announced that it would temporarily close down its grocery store amid the ongoing Covid-19 outbreak and a decline in the business’ walk-in customers. Habitat’s landlord, LHN Space Resources, had also been unwilling to extend the lease.

The company’s management has decided to continue the suspension of Habitat’s operations “in view of the difficult commercial circumstances” until further notice, the Honestbee spokesperson said.

According to a court document seen by Tech in Asia late last month, Honestbee is mulling over the permanent closure of Habitat, as continuing to run Habitat would incur “significant overheads and working capital,” said CEO Lay Ann Ong.

The document also showed that talks with an overseas retail conglomerate for a US$50 million injection have stalled, as the large company is reluctant to “fund the debt restructuring” of Honestbee and is concerned over the “uncertainty” caused by the coronavirus outbreak, said Ong.

Update (March 12, 12:15 pm): This article was updated to include a response from Honestbee.