In November 2022, Norwegian online grocery company Oda announced the cutting of 70 full-time positions, affecting 18% of its Global Group Services department and 6% of its total workforce. This move comes as the company shifts its strategy from hyper-growth to moderate growth, focusing on profitability in existing markets. In this article, we'll discuss what happened, why it occurred, and the potential future impact of these layoffs on the industry and workforce.
The decision to lay off employees at Oda was primarily driven by a strategic shift from hyper-growth to moderate growth, with a stronger focus on profitability in existing markets. This change in strategy led to a downsizing of the Global Group Services department, which was responsible for platform development and international expansion. According to Oda's CEO, Karl Munthe-Kaas, the department was considered "overdimensioned" due to the new strategy.
Additionally, the company faced challenges in raising capital as a result of the interest rate and inflation spiral, as well as the impact of the Ukraine war on capital markets. These economic pressures contributed to the need for Oda to reevaluate its growth plans and prioritize profitability in its current markets, including Norway, Finland, and soon Germany.
Oda's strategic shift towards moderate growth and profitability in existing markets suggests that the company aims to reduce expenses and adapt to changing market conditions. Post-layoffs, Oda is realigning its investments to better suit the current needs of the business and optimize for continued growth.
The company is now focusing on its operations in Norway, Finland, and soon Germany, with a downscaled growth plan in Germany and new international expansions put on hold. This approach may position Oda for future success by concentrating on markets where it already has a presence and can potentially achieve profitability more quickly.
Oda's layoffs may signal a broader trend in the food industry, as companies reassess their growth strategies and focus on profitability in existing markets. This shift could lead to a more cautious approach to expansion, with businesses prioritizing sustainable growth over rapid market penetration.
As a result, the industry may see a slowdown in international expansions and a greater emphasis on optimizing operations in current markets. This trend could also lead to increased competition among existing players, as they vie for market share and customer loyalty in a more challenging economic environment.
Oda's layoffs stem from a strategic shift towards moderate growth and profitability in existing markets, resulting in downsizing its Global Group Services department. This move may reflect a broader trend in the food industry, with companies prioritizing sustainable growth over rapid expansion. Oda's future success could depend on its ability to optimize operations and compete in a more challenging economic environment, potentially leading to further adjustments in its growth strategy.
