Deliveroo to cut 350 jobs – 9% of workforce | business news

The food delivery platform Deliveroo announced that it will lay off about 350 people, accounting for about 9% of the company’s total workforce.

global work Delivery Founder and chief executive Will Shu told staff that business would be affected, but it was understood UK staff would be the most affected by the loss.

Some employees will be transferred to different business areas in an effort to keep the number of layoffs to about 300, while the layoff process will begin across the company.

Deliveroo needs to “go further” to make the company profitable as the boom in COVID-era food delivery orders fades on the platform, company chiefs say.

Competition in the delivery sector and global economic conditions were blamed for the cuts. “We operate in a highly competitive industry, and at the same time, we are also in a difficult consumer environment in most of our markets,” Mr Shu said.

“We are experiencing record high inflation, rising interest rates, an energy crisis and fears of a UK recession.”

Like many tech companies and start-ups, Deliveroo said it was hiring rapidly during the pandemic and is now laying off staff. “Our headcount has grown very rapidly in recent years. This is in response to unprecedented growth rates supported by COVID-related tailwinds,” Mr Shu added.

He said the layoffs were his responsibility and that he should “take a more balanced approach to headcount growth”.

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Listed on the London Stock Exchange in March 2021, the company is known as Worst IPO That’s in London’s history after the share price fell by a quarter and wiped £7.6bn off the total value of Deliveroo shares.

The company’s latest quarterly results, released last month, showed it broke even and expected to be profitable this year.

Financial performance was helped by cost containment measures and higher customer fees after orders fell from the peak of the pandemic: Orders fell 2%, but that was offset by higher restaurant prices.

But cost-saving measures in the final quarter of 2022 — including closing loss-making businesses in Australia and the Netherlands — weren’t enough, as Shu said on Thursday: “Frankly, our fixed cost base is critical for our business. too big. “

Deliveroo uses gig economy workers to deliver food – they are not considered employees and therefore cannot be made redundant.

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