Delivery giant DoorDash is laying off an unlucky 1250 of its staff as tough market conditions bite.
The US delivery company operates in Australia and some Australians in its corporate division have been impacted by the job cuts, which has seen the company’s overall global headcount trimmed by seven per cent.
Tony Xu, DoorDash’s chief executive officer, said earlier this week that it was a “painful decision” and a “difficult change”.
He said that during the Covid-19 pandemic the company had scaled up rapidly — but in hindsight it had been too rapid and some head office staff had to go.
“Most of our investments are paying off, and 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,” he said in a statement.
“That’s on me. As a result, operating expenses grew quickly …
“Our business has been more resilient than other e-commerce companies, but we too are not immune to the external challenges.”
Staff who have been chopped from their roles will receive a considerable severance package including 17 weeks’ of compensation and continuing health care benefits until March next year.
A DoorDash spokesperson confirmed to news.com.au that Australians had been caught up in the lay-off round but wouldn’t say exactly how many had been cut from their roles.
“The lay-offs are limited to corporate employees, including in Australia,” the spokesperson told news.com.au.
“The positions do not affect any single team.
“While some of the affected employees are based in Australia, this does not affect our presence in Australia overall.”
It’s been a tough time for delivery companies across Australia, with other companies folding or being forced to lay off staff to survive.
In fact, DoorDash’s job cuts comes just two weeks after a major rival, Deliveroo, announced it was shutting down its Australian branch as the firm failed to turn a profit.
Deliveroo had more than 12,000 partner restaurants, 15,000 riders, and employs about 120 staff who were all caught up in the collapse.
Although the failed firm didn’t technically employ its riders, as they were contractors, it offered up to four weeks’ compensation while they look for more jobs.
Stream more business news live & on demand with Flash. 25+ news channels in 1 place. New to Flash? Try 1 month free. Offer available for a limited time only >
Other failed delivery businesses include Send, a 10-minute grocery delivery service which went into liquidation at the end of May, after the company spent $11 million in eight months to stay afloat.
Voly, which also tried to deliver groceries, also went under last month despite raising $18 million in funding at the end of last year. Before its collapse, it had laid off half its office staff several months prior.
Meanwhile, in June, the $75 million-backed grocery delivery start-up Milkrun sent out an astonishing email to customers apologising if they feel “let down” by it, which its CEO said could include late delivery or poor service.
Milkrun has since scaled back its delivery promises as it reported $13 loss per order.
A Victorian food delivery company called Delivr that styled itself as a rival to UberEats and Deliveroo also collapsed in July as it became unprofitable.