Delivery service Doordash lays off around 1,250 employees

The US on-demand delivery service Doordash has laid off around 1,250 employees. CEO Tony Xu informed his staff via email. The main reason for the job cuts is rising costs. However, the company also acknowledged that it had previously hired too many employees.

Mass layoff at Doordash

The wave of layoffs in the tech industry never ends. Inflation, rising costs and lower consumer spending are making life difficult for many companies. Now it has hit the US delivery service Doordash.

To cut costs, the company laid off around 1,250 employees. CEO Tony Xu recently shared this with his staff Write With. It says:

This is the most difficult change at DoorDash to announce in our almost 10 year history. Today we will reduce the number of our employees by around 1250 and say goodbye to many talented colleagues.

Doordash admits mistakes

Xu, meanwhile, struggled to explain the job cuts as the company continues to grow. Compared to the high phase of the corona pandemic, however, growth has declined.

However, the pandemic opened up new opportunities for Doordash. The company therefore hired numerous new employees at the time. In retrospect, Tony Xu now admitted that too many new positions had been filled too quickly:

We haven’t been as rigorous in managing our team growth as we should have been. It’s up to me As a result, operating costs have risen rapidly.

Layoffs in the tech industry

Doordash launched in Germany in November 2021. At that time, the US group also bought the Finnish delivery service Wolt for around seven billion euros. In addition to Wolt, Doordash is also involved in the German on-demand delivery service Flink.

Meanwhile, rival Gorillas laid off hundreds of employees in May. The company is now about to be taken over by the Turkish start-up Getir. The current wave of layoffs in turn affects the tech industry in particular. Facebook parent company Meta, Amazon and Google have previously laid off thousands of employees.

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