Food delivery service DoorDash announced Nov. 30 the company is laying off 1,250 corporate employees as part of an ongoing effort to cut costs.
“I did not take this decision lightly. We have and will continue to reduce our non-headcount operating expenses, but that alone wouldn’t close the gap. This hard reality ultimately led me to make this painful decision to reduce our team size,” DoorDash CEO Tony Xu told employees in a message.
This is the most difficult change to DoorDash that I’ve had to announce in our almost 10-year history. Today, we are reducing our corporate headcount and saying goodbye to many talented teammates. https://t.co/xSYUVLwp17
— Tony Xu (@t_xu) November 30, 2022
The company sent emails to affected employees to notify them about compensation and other areas of continued support, Xu said in the message. Those who are laid off will receive 17 weeks’ worth of severance pay, as well as healthcare benefits through March 2023. DoorDash is also offering career transition services for impacted employees and immigration support for those affected who are on work visas. (RELATED: Apple Workers’ Unionization Bid Fails)
The company announced its Initial Public Offering (IPO) at the end of 2020, and its value peaked at $81.1 billion in November 2021, CNBC reported. Shares have gone up nearly 6% upon Wednesday’s announcement, after starting the day at $53.35 per share. Shares are down over 60% year to date, reflecting a broader stock downturn in the tech sector caused by higher interest rates, according to CNBC.
DoorDash in April told workers the company would slow down hiring for the remainder of 2022, Insider reported. The company doubled in size in 2021 due to skyrocketing pandemic demand for food delivery after establishing itself as the leader of the food delivery industry, according to McKinsey data.