DoorDash’s CEO admitted that they were not rigid in managing the team’s growth. The company has also announced severance benefits to all the departing employees.
On Wednesday, November 30, the Food Distribution Forum Doordash Announced plans to lay off 1,250 employees in a bid to rein in its operating costs. The development comes amid concerns about a global economic slowdown.
With this, DoorDash joined other American multinational companies in laying off employees. The current macro scenario of rising inflation and rising interest rates has put pressure on the company’s operations.
In a message on Wednesday, the company’s CEO Tony Xu said the pandemic has presented some unprecedented opportunities to serve consumers and merchants. To accelerate growth, DoorDash decided to increase hiring at that time.
As of December 2021, DoorDash has a total of 8,600 employees worldwide. In an apology note to employees on Wednesday, November 30, DoorDash’s CEO wrote:
“This is the most difficult change at DoorDash I have had to announce in our nearly 10 year history. If you are one of those affected, I am truly sorry and I apologize that some of you have woken up to this news instead of reading it during more normal hours.
However, all those people who have been affected due to this decision will get 17 weeks of compensation along with stock vests of February 2023. They will also get all health benefits till March 31, 2023.
For those who are in the US on H1B visas, DoorDash will provide them with an expiration date of March 1, 2023. Thus, there will be some relief to the people who want to live and work in the US. In addition, DoorDash stated: “We will create an opt-in directory of companies to reach out to you and offer recruiting assistance to help you find your next job”.
DoorDash CEO Admits Mistakes
DoorDash CEO Tony Xu said that as the pandemic presented opportunities for growth, the company went on a rigorous hiring spree. However, they failed to follow the rigorous recruitment process. Ju has taken full responsibility for this to add,
“We accelerated our hiring to catch up with our growth and launched several new businesses in response to feedback from our audience. Most of our investments are paying off, and while we’ve always been disciplined in how we’ve managed our business and operational metrics, we weren’t as rigorous as we should have been in managing the growth of our team. He’s on me As a result, operating expenses rose sharply”.
However, he adds that DoorDash’s business is more flexible than other e-commerce companies in the market. But the company is still not immune to external challenges. Xu is also very optimistic about the future of DoorDash.
“The runway ahead is massive and we have built tremendous momentum. If we can achieve our mission of developing and empowering local economies around the world, not only will we prosper as a business, but I am confident that much more will be achieved as we create a world where millions of merchants can flourish, bringing out the best in the ethos and personality of our neighbourhood,” he said.
Bhushan is passionate about Fintech and has a good grasp of understanding the financial markets. His interest in economics and finance drew his attention to the newly emerging blockchain technology and cryptocurrency markets. He is in the process of continuous learning and keeps motivating himself by sharing his acquired knowledge. In his spare time he reads thriller fiction novels and occasionally explores his culinary skills.
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