Deliveroo cuts 350 jobs, mainly in the UK, after falling in online orders.
We grew our headcount too fast and face severe economic headwinds, says CEO Will Shu
Deliveroo, the online food delivery company, has announced plans to cut 350 jobs, about 9% of its workforce, in response to the current economic situation. The company’s CEO, Will Shu, acknowledged the company’s rapid headcount growth in recent years due to the unprecedented growth during the COVID-19 pandemic but admitted he should have taken a more balanced approach to headcount growth.
The company faces several economic challenges, including high inflation, rising interest rates, and increasing energy costs. Shu believes cost-cutting measures are necessary to reshape the business and focus on profitability. In January, the company reported that cost-cutting helped boost profitability despite a 2% fall in order numbers across the group in the year’s final quarter. In the UK and Ireland, order numbers remained at 40.6 million out of 75.1 million in the last quarter.
The job cuts come after Deliveroo exited the Australian and Dutch markets. The company hopes to limit the redundancies to about 300 by redeploying some affected staff to new roles, most of which will be from its UK operation. Shu highlighted concerns about the current economic situation, including the fear of a recession in the UK, as the reasons for needing to reshape the business and focus on profitability.
Deliveroo is the latest tech-focused business to announce job cuts, following companies like Facebook, Google, Microsoft, Snapchat, and Twitter. Shu believes that companies like Deliveroo must now demonstrate and accelerate a clear path to profits and that this responsibility falls on him. He stated that he would not make the same mistakes in the future, that the industry remains young, and that there is still a vast market opportunity ahead.
The article is “Deliveroo cuts 350 jobs, mostly in the UK, after falling in online orders.”