SF food delivery company DoorDash lays off 1,250 people
DoorDash, the food delivery technology company headquartered in San Francisco, announced Wednesday that it would lay off 1,250 employees — about 6% of its workforce.
In a message shared with employees and posted on the company’s blog, DoorDash CEO Tony Xu said the mass layoffs are “the most difficult change to DoorDash that I’ve had to announce in our nearly 10-year history.”
“I know that for many of you, today’s news will come as a shock, especially because our business is strong and continues to grow,” Xu said in the notice.
He explained that the layoffs, as with many other recent high-profile layoffs in the tech industry, are a retreat from “sudden and unprecedented opportunities”[ads1]; for company growth that resulted in over-hiring and increased operating costs. DoorDash, he explained, “was actually undersized as a company” before the pandemic. A spokesperson for DoorDash told SFGATE that the company had about 20,000 employees worldwide before the layoffs. (The company had about 8,600 workers worldwide at the start of the year and about 3,900 at the start of 2021, according to SEC filings.)
“While our business continues to grow rapidly, given how quickly we hired, our operating costs — if they remain unabated — will continue to outgrow our revenue,” he added.
Affected employees, according to Xu’s memo, will receive 17 weeks of compensation plus a stock vest in February 2023 and health care until the end of March 2023. Employees on H-1B visas will have their layoffs set for March 1, 2023, effectively extending the 60-day the time frame for which workers can find jobs in the United States.
This news follows high-profile layoffs from the likes of Salesforce, Meta and Elon Musk’s Twitter — but this is the first among the major food delivery services to implement layoffs this year. Uber (which also owns Postmates in addition to the Uber Eats service) and Chicago-based Grubhub have yet to implement layoffs in 2022.
SFGATE food reporter Nico Madrigal-Yankowski contributed to this report.
