honestbee lays off estimated 70-80% of staff amid pivot to pizza joint

Singapore

DISTRESSED startup honestbee has laid off about 104 employees out of its 130-strong headcount in Singapore, the firm said on Tuesday in response to queries from The Business Times (BT).

Earlier on Tuesday, BT reported that the startup laid off about the bulk of its 60-odd headcount on Monday evening, with several sources estimating that between 70 per cent and 80 per cent of staff have been affected.

An honestbee spokesman clarified that the startup's total headcount in Singapore was 130, of whom about 80 per cent were laid off on Monday.

The spokesman also confirmed that a member of the management team "has voluntarily been made redundant" but did not provide further details.

"All affected employees are not required to serve out their notice but will be paid their notice period," she added.

The cuts come amid honestbee's ongoing plans to open a pizza shop in Siglap, in a shophouse unit it has leased from chief executive Ong Lay Ann for a year. The startup is currently under interim court protection, while it seeks to pass a scheme of arrangement that will restructure some US$230 million worth of debt.

In emails sent to affected staff on Monday evening, seen by BT, honestbee cited "several external commercial pressures that has resulted in the protracted closure of habitat" as the rationale for the layoffs, which took effect on Monday itself. habitat, honestbee's concept supermarket at 34 Boon Leat Terrace, has been closed for about a month.

BT further understands that earlier on Monday, some foreign employees had received letters indicating that their work passes had been cancelled by the Ministry of Manpower, but were only notified by honestbee about their retrenchment later in the evening.

When asked about this issue, the honestbee spokesman said: "Employees were made redundant in tandem with the cancellation of work passes."

An honestbee spokesman confirmed to BT that there is a "reduction of non-core staff as the company does not foresee operating habitat at its full strength over the next few weeks", but did not respond by press time to a follow-up question on the number of staff laid off.

"The temporary closure of habitat by honestbee has impacted the company's revenues. As a result, employees have been told to expect a delay in their February salaries and CPF (Central Provident Fund) contributions until further funding can be secured," the spokesman said in an emailed statement.

Earlier on Monday, BT reported that honestbee has already shifted kitchen equipment and furniture to the shophouse unit at Upper East Coast Road, even as the startup owes its staff salaries and CPF contributions for February.

BT understands that honestbee has only retained a small team of staff to operate the Siglap pizza outlet. honestbee will be leasing the unit for a year from Mr Ong at the "market rate", the startup's spokesman said. According to regulatory filings, two other units in the same two-storey shophouse are also owned by Mr Ong.

When BT visited the unit occupied by honestbee on Saturday, a refrigerator, a pasta maker, a coffee machine, large cardboard boxes, IT equipment, honestbee-branded bags and several shelves were visible from the exterior.

BT also understands from sources that honestbee owns a wood-fired pizza oven, purchased in 2018 for habitat, that could be used in the new pizza shop. One source estimated that it was bought for about S$38,000, but has been left unused thus far.

The honestbee spokesperson confirmed that the company is in the "very early stages of setting up a quick service F&B concept and a tech-enabled convenience store" at the location. "(The) store will be focused on fast food service for takeaway. It will be similar in concept to habitat in that it will also be utilising existing technologies... such as the Click-and-Collect functionalities, Scan and Go feature, and our proprietary BeePay wallet," she said.

The spokesperson declined to comment on whether honestbee plans to remain a tenant at Boon Leat Terrace or terminate its lease early. The lease is due for renewal in September.

It remains to be seen what impact honestbee's downsizing and business pivot will have on its restructuring, and whether this will impede creditors from supporting the scheme.

honestbee's latest plan comes about a week after it cleared out its furniture, fixtures and equipment from habitat's premises at Boon Leat Terrace, escalating tensions between the startup and habitat landlord LHN Space Resources.

BT understands that honestbee called the police after LHN representatives showed up at habitat to question why the startup was shifting its furniture out. The furniture is understood to have been transported to a warehouse space in Genting Lane.

honestbee's next court hearing on its restructuring is set for March 26.