DoorDash Inc. has announced that it will lay off approximately 1,250 employees as part of a major corporate restructuring.
The mass layoffs represent about 7% of the company’s total workforce, according to Securities and Exchange Commission filings. The company employs his 8,600 employees at the corporate level as of December 31, 2021.
In a letter to staff shared in a press release, DoorDash CEO Tony Xu said, “I am truly sorry that some people are waking up to this news instead of reading it during normal hours. I apologize for being here.
Xu said the move was enacted to remedy the over-hiring that occurred during the COVID-19 pandemic.
The food delivery company was small at the corporate level before the pandemic.
With restaurants closed and people ordered to stay home during the outbreak of the pandemic, demand for deliveries increased, fueling DoorDash’s economic growth.
With the growth of the company, it finally went public on December 9, 2020. By the first quarter of 2021, DoorDash generated his $1.07 billion, up 69% year over year. Consumers up 219% year-on-year He placed 329 million orders.
DoorDash’s revenue for the third quarter of this year was $1.7 billion, up 33%. But the company also reported a loss of $296 million, almost triple the same period last year.
“Most of our investments have paid off,” Xu said in a company letter. “While we have always been disciplined in how we manage our business and operational metrics, we have not been as rigorous as we should be when it comes to managing team growth.”
DoorDash’s operating expenses are higher than its revenues, and cost-cutting measures other than headcount cuts aren’t enough to close the gap, he added.
DoorDash isn’t the only tech company to announce major layoffs of its corporate workforce, following the quarter.
Meta Platforms Inc. laid off over 11,000 employees, accounting for 13% of its workforce.
Twitter Inc. laid off half of the company’s roughly 7,500 employees before business mogul Elon Musk acquired the social media platform.
“We are not immune to external challenges either, and our growth rate has slowed relative to that of the pandemic,” said Xu.
DoorDash will provide 17 weeks of financial compensation to laid-off workers. This is the stock best for February 2023. I will also keep my medical benefits until March 31, 2023.
The company will stop providing immigration support to employees applying for visas on March 1, 2023 to allow enough time for employees to find new jobs that sponsor their residency in the United States. increase. DoorDash provides a system for companies hiring new employees to hire laid-off employees.
“Despite today’s news, I remain very optimistic about our future and believe in the importance of the role we can play in the world.”