Grubhub said it would offer severance packages to employees for up to 16 weeks but declined to comment on specific positions removed.
In a message to employees on Monday, June 12, food delivery platform Grubhub said it plans to lay off 400 employees, which is 15% of its corporate workforce. The company cited the reason as maintaining “competitiveness” in the current macro environment.
Furthermore, compared to other market players such as Uber Eats and DoorDash, Grubhub has failed to capture market share. The company said that it will give severance package to the employees for 16 weeks. However, Grubhub declined to comment on the specific groups or posts affected. In his memo, Grubhub CEO Howard Migdal said:
“There is no doubt that we have a solid foundation and a huge opportunity ahead of us – but it is also clear that we need to make some tough decisions to maintain our competitiveness, while providing the best possible service to diners Provide and be successful for our other partners, and long term.
Back in 2021, Dutch multinational Just Eat Takeaway.com acquired Grubhub in all-stock transaction at a $7.3 billion valuation. However, it turns out that less than a year after the sale, Just Eat Takeaway Said It is exploring a “partial or full sale” of Grubhub.
A Grubhub spokeswoman has not responded to whether the staff layoffs are related to the potential sale process.
focus on future opportunities
Nearly 400 people are being affected by the job cuts, highlighting the mounting troubles the Chicago-based company is facing. Grubhub, which includes subsidiaries such as Seamless and Eat24, is struggling despite ongoing demand for takeout. Even though the pandemic boom has subsided, Grubhub has been unable to gain traction.
As of April, Grubhub and its subsidiaries accounted for only 9% of consumer spending on food delivery in the US, according to Bloomberg Second Measure. Grubhub CEO Howard Migdal said the company will continue to focus on future business priorities. He couple,
“While our business has grown from our 2019 pre-pandemic levels, our operating and staff costs have increased at a higher rate. These changes, while difficult, will help ensure that we have the right resources and structure in place to focus on business priorities and the opportunities ahead.
The food delivery space is getting more competitive with each passing day, and it will be important to watch how Grubhub navigates through this time.
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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