DoorDash lays off 1,250 employees to cut costs
CEO Tony Xu said the company's 'growth has tapered vs our pandemic growth rates'
Evercore ISI Senior Managing Director Mark Mahaney shares his DoorDash and Amazon stock price targets for 2022.
DoorDash announced Wednesday that it is laying off 1,250 corporate employees to reduce operating expenses as it battles the uncertain economic environment.
CEO Tony Xu apologized to affected employees in a blog post, saying that this is the "most difficult change to DoorDash" that he has had to announce in its nearly 10-year history.
AMC NETWORKS PLANS LAYOFFS AS CEO CHRISTINA SPADE EXITS
Xu admitted that the company continues to grow fast but given how quickly it hired employees, "its operating expenses – if left unabated – would continue to outgrow our revenue." The chief executive even blamed himself for not better managing team growth.
A delivery person for Doordash rides his bike in the rain during the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., November 13, 2020. REUTERS/Carlo Allegri (REUTERS/Carlo Allegri / Reuters Photos)
The food delivery company faced "sudden and unprecedented opportunities" after the pandemic gripped the world, according to Xu. To keep up with the growth, the company sped up hiring and started many new businesses, he added.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DASH | DOORDASH INC. | 173.17 | +0.97 | +0.56% |
UNITED FURNITURE FIRES THOUSANDS BY TEXT DAYS BEFORE THANKSGIVING
Although most investments are paying off, "we were not as rigorous as we should have been in managing our team growth. That’s on me," he said.
A DoorDash delivery worker walks his bike along the road in the Mission neighborhood of San Francisco, California. (iStock / iStock)
Xu noted that DoorDash has been more resilient than other e-commerce companies but It's still "not immune to the external challenges and growth has tapered vs our pandemic growth rates."
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Xu said the company plans to continue to reduce its non-headcount operating expenses, "but that alone wouldn’t close the gap."
DoorDash is just one of a handful of companies that have made headlines in recent weeks for trimming their workforce amid high inflation and growing fears of a recession.
Among them include AMC Networks as well as Amazon and Twitter.