Grubhub is Laying Off 400 Employees
Grubhub, the food delivery brand, is facing challenges and has decided to lay off 400 corporate employees, which accounts for approximately 15% of its workforce.
The CEO of Grubhub, Howard Migdal, acknowledged the tough decisions in a letter sent to the staff and posted on the company’s website. He emphasized the need to maintain competitiveness, deliver excellent service, and secure long-term success.
Migdal expressed that the reduction in headcount was a difficult decision, and he anticipated it would come as a shock to the affected employees. Notifications to the impacted staff were being sent out in the following hours after the letter’s release at 8 AM ET.
While the food delivery industry experienced growth in recent years, driven by the pandemic’s impact on dining establishments, Grubhub has also encountered higher costs.
Migdal acknowledged that their business has grown since pre-pandemic levels in 2019, but operating and staff costs have increased at a faster rate.
Moreover, the appetite for delivery has been declining, as reported by Just Eat Takeaway.com, which acquired Grubhub in 2021. North American orders fell by 17% in the first quarter of 2023 compared to the same period the previous year.
Migdal identified the highly competitive and constantly evolving nature of the industry as another factor leading to the workforce reduction.
Grubhub is competing with major players like Uber Eats and Doordash for restaurants’ delivery business. Some establishments have opted to manage their own delivery or rely on local services instead.
Grubhub’s announcement aligns with a trend of companies reducing staff this year. Other notable companies, including Spotify, Tyson, Walmart, and McDonald’s, have also announced layoffs.
The industry landscape continues to evolve, requiring companies to evaluate their operational setup to meet the needs of diners, restaurants, and delivery partners.
