Dive Brief:
- Grubhub is laying off 15% of its workforce, or about 400 positions, Grubhub CEO Howard Migdal said in an email sent to employees on Monday.
- While the company has “grown since [its] 2019 pre-pandemic levels, [its] operating and staff costs have increased at a higher rate,” Midgal said.
- These layoffs come six months after DoorDash laid off 1,250 employees. CEO Tony Xu said that it hired too quickly, which led to rising operating expenses that would eventually have surpassed revenue.
Dive Insight:
Grubhub wouldn’t share which specific positions were eliminated, but layoffs will only impact corporate employees — not delivery drivers, the company wrote in an email to Restaurant Dive. Laid off workers will be offered “16 weeks of severance or [two] weeks for every year of service that is greater than 16 weeks.”
The company will roll out a new plan for its business and growth strategy in the near-term future, Grubhub said in the email.
“Rightsizing the business for where we are now — which includes ensuring we have the right resources and organizational structure focused on the right priorities — will allow us to be more agile, make bolder bets and take advantage of all of the opportunities on our doorstep,” Midgal said.
Grubhub has been rolling out new products to bolster its restaurant business this year, including expanding its commission-free Direct platform with new features and adding tools to its Grubhub for Restaurants portal. Earlier this month, Grubhub partnered with Homewood Suites by Hilton to offer food delivery to guests at about 500 restaurants.
Grubhub has been looking to expand its customer base as well. It most recently extended its partnership with Amazon, which provides a free year of Grubhub+ to Prime members. Just Eat Takeaway CFO Brent Wissink said in a March earnings call that this partnership “strengthened Grubhub’s competitiveness and represents a significant opportunity for future growth.”
Just Eat Takeaway has also been looking at strategic alternatives for Grubhub, including a possible sale.
