Illustration by Alex Castro / The Verge
DoorDash is laying off around 1,250 workers. The update, posted by DoorDash CEO Tony Xu, explains that the company grew too quickly during the covid pandemic, leading to an increase in operating expenses that could soon âoutgrowâ the companyâs revenue.
âWhile weâve 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,â Xu writes. âThatâs on me. As a result, operating expenses grew quickly … This hard reality ultimately led me to make this painful decision to reduce our team size.â
Xu adds that although DoorDash remained resilient during and after the covid pandemic, the company is not âimmuneâ to the current economic challenges. Itâs not clear which departments the layoffs hit the hardest.
This is the most difficult change to DoorDash that Iâve had to announce in our almost 10-year history. Today, we are reducing our corporate headcount and saying goodbye to many talented teammates. https://t.co/xSYUVLwp17
â Tony Xu (@t_xu) November 30, 2022
Workers affected by the job cuts will receive 17 weeks of compensation in addition to their February 2023 stock vest. Employees will also continue to receive healthcare benefits through March 31st, 2023, and will gain access to a directory that allows other companies to contact and recruit them. For employees in the US on a visa, DoorDash will set the termination date for March 1st, 2023, so they have enough time to find a new job.
DoorDash is just one of several technology companies contending with layoffs. While Elon Musk notably cut Twitterâs staff in half following his takeover, this was preceded by layoffs affecting Netflix, Peloton, Snap, Wayfair, Tesla, and several other companies. Earlier this month, Meta announced massive job cuts affecting 11,000 workers, while Amazon also said it would lay off 10,000 staff members.