Local start-up Honestbee said today that it was laying off 38 staff in Singapore as part of a restructuring exercise. It has also applied to the High Court to start a court-supervised restructuring process and to seek a moratorium against enforcement actions and legal proceedings that may be brought against it by its creditors.
“As a result of our reduced operations globally, the company has made a decision to right-size the company in order to cut costs and streamline its businesses,” said an Honestbee spokesperson in an email response to queries from TODAY. It added that a total of 38 employees, mainly in operations and engineering roles, will be affected, and they will be asked to serve out their notice period as per their contracts. “Their departures are not reflective of their performance, but rather due to the restructuring of our business operations in Singapore,” added the spokesperson.
The move, said Honestbee, was necessary to ensure the right structure for “long-term stability and success”. The company had appointed a new chief executive officer (CEO), Ong Lay Ann, on July 15. Ong took over from interim CEO Brian Koo, who in turn had taken over from co-founder of the company Joel Sng after the latter’s departure in early May.
In April, Honestbee announced that it would suspend some of its operations in Asia and cut its global headcount by 10 per cent as part of a strategic review. A month later, the firm suspended its food delivery and laundry services in Singapore.
A spate of high-level resignations has also taken place in the past month, including that of chief technology officer and co-founder Jonathan Low and chief financial officer Roger Koh. Sng and Low had co-founded the company with Isaac Tay in 2015. Tay left the company last year.
In a statement, the company added that it has filed an application to the High Court to begin a court-supervised restructuring process. “Honestbee has taken this imperative step to protect and preserve the value of its business while it restructures its operations across Asia,” it said. “The Court-supervised restructuring process is in the best interest of Honestbee’s stakeholders as the company can focus on reevaluating the business without interference, streamline operations, increase existing efficiencies and bring down the cost structure.”
The Business Times reported Ong as saying today that with the application, the company hopes to get a six-month reprieve from its creditors, whom it owes over US$180 million (RM748.2 million). Its creditors include investor Formation Group and associates of Koo, who is both the managing partner of Formation and the chairman of Honestbee.