DoorDash is shedding 1,250 individuals in an effort to rein in prices, the corporate’s CEO Tony Xu stated in a message to employees on Wednesday. Xu’s message notes that the pandemic introduced unprecedented alternatives to serve retailers and shoppers, and consequently, DoorDash sped up hiring to meet up with development. Xu says though a lot of the firm’s investments are paying off, it didn’t correctly handle group development.
“Most of our investments are paying off, and whereas we’ve at all times been disciplined in how we now have managed our enterprise and operational metrics, we weren’t as rigorous as we must always have been in managing our group development,” Xu wrote. “That’s on me. Because of this, working bills grew shortly.”
Xu says that given how shortly DoorDash employed, if the corporate didn’t tackle its working bills, they might proceed to outgrow gross sales development. He went on to notice that DoorDash’s enterprise is extra resilient than different e-commerce corporations.
“I didn’t take this resolution frivolously,” Xu wrote. “We now have and can proceed to scale back our non-headcount working bills, however that alone wouldn’t shut the hole. This difficult actuality in the end led me to make this painful resolution to scale back our group measurement.”
Staff who’re laid off will obtain 13 weeks of compensation, together with one four-week lump-sum severance cost. Xu’s memo additionally says impacted staff will obtain their February 2023 inventory vest. For visa-sponsored staff, the termination date will probably be March 1, 2023. Xu says this resolution will give them extra time to discover a new job.
DoorDash joins a rising listing of corporations which have lately decreased their workforce, corresponding to Meta, Amazon, Twitter and Lyft. Hiring within the tech trade considerably elevated in the course of the pandemic and has seen a harsh comedown as corporations admit they grew bills too quickly for the present local weather.
