The New York Post: Russian-backed grocery app Buyk furloughs 98% of U.S. employees due to sanctions
Russian-backed grocery app Buyk that operates in the U.S. abruptly furloughed the vast majority of its staff on Friday as sanctions against Russia left the company without funding.
Buyk , which was founded by two Russians and has sizable operations 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 were scared that an economic war between the US and Russia would cost them their jobs.
“We have made the tough decision to temporarily furlough our employees until we are able to secure more funding sources in the US,” Walker said. “Our founders Slava Bocharov and Rodion Shishkov have been providing bridge financing to Buyk until we close our next investment round. However, the sanctions against Russian banks have now made this bridge financing setup untenable, despite neither of our founders being sanctioned.”
“As of today, our assets still greatly exceed our liabilities, and we remain confident that Buyk’s proven ultrafast grocery model can make real-time retail a reality in the United States,” Walker said.
The 2% of employees that are not being furloughed are operations, HR, finance, legal and IT staff.
At least one Buyk employee did not know they were being furloughed until they were contacted by The Post.
“Once this goes public it will be bad,” the employee said. “A lot of the employees are single parents, mostly dads who have child support debt.”
After The Post broke the news, some Buyk corporate employees received calls telling them they were being furloughed, while others just received emails, sources said.
“Couriers are being told by email,” one Buyk employee steamed to The Post. “That’s how little respect they have for them.”
On Friday afternoon before announcing the furloughs, Buyk had abruptly sent workers home due to what the company claimed were technical problems.
“They just stated it’s an IT issue and won’t be resolved quickly so they sent everyone home,” one employee said. “Very random.”
As of Friday evening, Buyk’s app displayed a message to customers in both New York and Chicago looking to buy products like ice cream and pet food: “Demand is too high. We’ll continue taking orders soon!”
The news wasn’t totally unexpected after employees last week said they feared sanctions against Russia could filter down to Buyk workers. Their worries centered on Buyk’s ties to Russia’s largest state-controlled bank, Sberbank
which was recently sanctioned by the US and UK 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, which has raised money from Sberbank and includes a former Sberbank executive in its leadership team. Buyk’s retail operations chief Yana Pesotskaya previously worked as the managing director of Sberbank’s food technology portfolio from 2019 to 2021, according to her LinkedIn profile.
In addition, Buyk was founded as a spin-off of Samokat, a popular delivery app in Russia that’s partially owned by Sberbank. Buyk’s ties to Samokat include using some of the same technology and forwarding US customer support requests to Russia-based workers.
Russian workers gradually vanished 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 that it would have any impact on the business.”
“We’re an American company with American executives,” Walker added. “We’ll make sure that our employees understand that they are in no risk monetarily.”
But store-level Buyk employees said that Walker and other executives had not addressed the 800 pound gorilla even as he confirmed to The Post on Friday that they were all being furloughed.
“Everyone is concerned but nobody from the main office has communicated anything directly,” one Buyk employee said prior to finding out they had been furloughed. “If James Walker is talking to anyone it’s at the corporate level and that has not been communicated down to the store level at ALL so far.”