Technology

DoorDash cutting more than 1,000 corporate positions

Information about DoorDash pick-up at a grocery store
AP Photo/Nam Y. Huh
Information about DoorDash pick-up is seen at a grocery store in Mount Prospect, Ill.

Online food ordering and delivery company DoorDash is cutting more than 1,000 corporate positions amid slowing growth and rising expenses. 

CEO Tony Xu said in a message to employees on Wednesday that the decision is the most difficult change he has had to announce in the company’s almost 10-year history. 

He said the coronavirus pandemic presented “sudden and unexpected” opportunities to serve the needs of merchants, consumers and drivers. As a result, the company sped up its hiring to keep up with its growth and started new businesses in response to feedback from audiences. 

But Xu said the company was not as “rigorous” as it should have been with managing its growth, leading to quickly rising costs. 

“Our business has been more resilient than other ecommerce companies, but we too are not immune to the external challenges and growth has tapered vs our pandemic growth rates,” he said. 

Xu said DoorDash continues to grow fast, but its operating expenses would outpace its revenue if left unchecked. He said the company has and will continue to reduce its nonemployee expenses, but that alone will not close the gap. 

DoorDash is the latest in a series of technology companies announcing layoffs recently amid high costs. Meta, the parent company of Facebook, announced it was laying off 11,000 employees earlier this month, and Amazon reportedly plans to lay off 10,000 people

Xu said the company is taking steps to support the workers who are being laid off, such as providing them with 17 weeks of compensation, health benefits continuing until the end of March and assistance to find a new job. 

He added that he is still optimistic about the future of the company and that its business fundamentals remain strong. He said leaders believe they have reset the size and shape of the company to match its priorities, and DoorDash will continue to hire and add back recruiting capacity in a more targeted and rigorous way. 

Tags big tech DoorDash layoffs rising expenses Tony Xu
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