Grubhub is the latest food delivery service to cut jobs amid ongoing pressures on its industry.
The company announced Monday (June 12) that it is reducing staffing levels by 15%, a move that will impact about 400 employees.
The decision to conduct layoffs was born out of a need for the company to “maintain our competitiveness” and succeed in the long term, CEO Howard Migdal told employees in a message posted to the company website.
“While our business has grown since our 2019 pre-pandemic levels, our operating and staff costs have increased at a higher rate,” Migdall said in the announcement. “Right-sizing the business for where we are now — which includes ensuring we have the right resources and organizational structure focused on the right priorities — will allow us to be more agile, make bolder bets and take advantage of all of the opportunities on our doorstep.”
Migdall became CEO of Grubhub in March, joining the company after serving as CEO of parent company Just Eat Takeaway’s Canadian operations.
The layoffs come as several delivery companies see increased pressure from frugal consumers, many of whom are cutting back on on-demand convenience.
Research from the latest edition of PYMNTS’ Consumer Inflation Sentiment study, “Consumer Inflation Sentiment: The False Appeal of Deal-Chasing Consumers” found that 75% of consumers have scaled back on nonessential retail purchases.
More specifically, they’re opting not to have food delivered. PYMNTS’ Connected Dining study, “Connected Dining: Rising Costs Push Consumers Toward Pickup” found that 48% of consumers have been more likely to pick up their restaurant orders themselves instead of having them delivered due to inflation.
British multinational aggregator Deliveroo reported earlier this year that it was on track to achieve profitability, but this was only possible after CEO Will Shu announced that the aggregator was letting go of 9% of its global workforce due to economic pressures.
Grubhub’s job cuts are happening in a year in which several tech companies have reduced staffing levels.
The tech sector cut more than 22,000 jobs in May at companies that included Meta Platforms, LinkedIn and Shopify. As of the end of May, the sector had lost 136,831 jobs, the highest level in more than 20 years.