DoorDash plans to sack 1,250 employees, roughly 6% of its workforce, the company announced Wednesday.
The move would allow the food-delivery company to cut costs as it deals with a slowdown in demand.
The company admitted that it had over-hired during the pandemic — much like other tech firms — but it was primarily to cater to a surge in demand from people stuck at home.
“Most of our investments are paying off, and while we’ve always been disciplined in how we have managed our business and operational metrics, we were not as rigorous as we should have been in managing our team growth. That’s on me. As a result, operating expenses grew quickly,” said Tony Xu, chief executive at DoorDash, in a memo to employees.
Those who were impacted by the layoffs will receive 17 weeks of severance and 2023 vesting as part of the severance package.
The termination date for visa-sponsored employees will be March 1, 2023, to allow them additional time to find a new job, Xu noted.
Following the announcement, the company’s shares, which have fallen roughly 64% this year, were reportedly up about 5%.
The layoffs come just a few weeks after DoorDash reported a quarterly net loss of $295 million.