Business

Russia-backed food app Buyk furloughs 98% of employees due to sanctions

Russian-backed grocery app Buyk abruptly furloughed the vast majority of its employees on Friday as sanctions against Russia left the company without funding.

Buyk, which was founded by two Russians and has sizable offices in New York and Chicago, is furloughing about 98% of its employees until it can secure funding from American sources, CEO James Walker said in a statement to The Post.

The news comes about a week after The Post reported that Buyk employees feared an economic war between the US and Russia would cost them their jobs.

“We have made the difficult decision to place our employees on temporary leave until we are able to secure additional funding sources in the United States,” Walker said. “Our founders Slava Bocharov and Rodion Shishkov have provided Buyk with bridge financing until we close our next investment round. However, sanctions against Russian banks have now made this bridge financing unsustainable, although none of our founders have been sanctioned.”

“To date, our assets still far exceed our liabilities, and we remain confident that Buyk’s proven ultra-fast grocery model will make real-time retail a reality in the United States,” said Walker.

The 2% of employees who are not furloughed are operations, HR, finance, legal and IT staff.

“As soon as this goes public, it will be bad,” said a Buyk employee. “Many of the employees are single parents, mostly fathers who owe child support.”
Noam Galai

At least one Buyk employee did not know he was on furlough until contacted by the Post.

“As soon as this goes public, it will be bad,” said the employee. “Many of the employees are single parents, mostly fathers who owe child support.”

On Friday afternoon, Buyk abruptly sent workers home because of alleged technical problems.

“They just explained that it was an IT problem and couldn’t be solved quickly, so they sent everyone home,” said one employee. “Very random.”

As of Friday afternoon, the Buyk app displayed a message to customers in New York and Chicago who wanted to buy products like ice cream and pet food: “Demand is too high. We’ll be taking orders again soon!”

purchase
Buyk has extensive ties to the sanctioned Russian bank Sberbank.
Bloomberg

The news was not entirely unexpected after employees said last week they feared sanctions against Russia could spill over to Buyk workers. Their concerns centered on Buyk’s ties to Russia’s largest state-controlled bank, Sberbank, which was recently sanctioned by the US and Britain in retaliation for Vladimir Putin’s brutal invasion of Ukraine.

One of the investors in Buyk’s initial $46 million fundraising round was a venture capital fund called Fort Ross Ventures money collected from Sberbank and includes a former Sberbank executive in its leadership team. Yana Pesotskaya, head of Buyk’s retail operations, previously served as managing director of Sberbank’s food technology portfolio from 2019 to 2021, according to her LinkedIn profile.

Additionally, Buyk was founded as a spin-off of Samokat, a popular delivery app in Russia that is partially owned by Sberbank. Buyk’s connections to Samokat include using some of the same technologies and forwarding US customer support requests to Russia-based staff.

Russian workers gradually disappeared from Buyk’s Telegram messaging channels without explanation this week ahead of Friday’s shutdown, a company source said.

In an interview with The Post conducted last week before the Sberbank sanctions were announced, Buyk CEO James Walker said of possible sanctions: “I don’t know if it would have any impact on the business.”

“We’re an American company with American leaders,” Walker added. “We will make sure that our employees understand that they are not taking any financial risk.”

But Buyk store-level employees said Walker and other executives have not approached the 800-pound gorilla, though he confirmed to the Post on Friday that they were all on furlough.

“Everyone is concerned, but no one from headquarters has communicated anything directly,” said a Buyk employee before finding out they were on furlough. “When James Walker speaks to anyone, it is at the corporate level and this has NOT been communicated down to the store level.”

https://nypost.com/2022/03/04/russian-backed-grocery-app-buyk-furloughs-98-of-employees-due-to-sanctions/ Russia-backed food app Buyk furloughs 98% of employees due to sanctions

DUSTIN JONES

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