DoorDash to Layoff Several Employees, Company “Outgrew” During COVID-19
Around 1,250 employees of DoorDash will lose their jobs. The report from DoorDash CEO Tony Xu notes that the firm expanded too rapidly during the COVID-19 outbreak, increasing operational costs that may soon “outgrow” the company’s income.
While we’ve always been disciplined in how we have managed our business and operational metrics, we were not as rigorous as we should have been in managing our team growth
That’s on me. As a result, operating expenses grew quickly … This hard reality ultimately led me to make this painful decision to reduce our team size.”
DoorDash acts as a go-between for restaurants and consumers, offering an on-demand meal delivery service. DoorDash receives menus and pricing from restaurants, which it then makes available to hundreds of users via its app. Online users may purchase meals, which are subsequently brought to their homes by professional delivery workers known as dashers.
One of DoorDash’s distinctive features is that it often charges no delivery costs at all. Additionally, the pricing of food displayed by restaurants on the app are the same as what it could be in-store, and because there is no fee to join up, users are not paying anything extra to utilize the app for meal delivery. Realizing how DoorDash has thrived despite being a non-profit organization is surprising.
DoorDash is not “immune” to the present economic difficulties, according to Xu, who also notes that the firm was resilient both before and after the covid outbreak. It’s unclear which departments the cutbacks have affected the most severely.
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
Employees who lost their jobs will also get a February 2023 stock vesting bonus in addition to 17 weeks of pay. Additionally, workers will continue to get healthcare benefits until March 31, 2023, and they will have access to a directory that other businesses may use to get in touch with and hire them. DoorDash will set the termination date for workers who are in the US on a visa for March 1st, 2023, to give them ample time to find another employment.
Several digital businesses, like DoorDash, are dealing with layoffs. Although Elon Musk famously reduced Twitter’s employees by half after taking control, there were earlier layoffs from tech giants such as Amazon, Meta, Intel and Apple.