A Grubhub delivery person makes bicycle deliveries on the empty streets of Washington, D.C., on April 2, 2020. The CEO of GrubHub announced Monday that, although the company has grown from pre-pandemic levels, it is laying off about 15% of its corporate workforce in an attempt to curb rising operating and staff costs. File Photo by Erik S. Lesser/EPA-EFE
June 12 (UPI) — The CEO of GrubHub announced Monday that the company is laying off about 15% of its corporate workforce in an attempt to curb rising operating and staff costs.
CEO Howard Migdal said in a message to all Grubhub employees that the business has grown since its 2019 pre-pandemic levels, but operating and staff costs have increased at a higher rate.
“There is no doubt whatsoever that we have a solid foundation in place and an immense opportunity ahead of us,” Migdal said. “But it is also clear that we need to make some tough decisions in order to maintain our competitiveness, deliver the best possible service for diners and our other partners, and be successful for the long-term.”
GrubHub, based in Chicago, was purchased in 2021 by Dutch multinational online food ordering company Just Eat Takeaway. The company appointed Migdal as CEO of GrubHub in March. The CEO said he has spent the time since trying to understand the business and market.
Data from Bloomberg Second Measure puts Grubhub’s sales significantly behind its primary competitors in Uber Eats and DoorDash. This includes Grubhub’s subsidiaries, together making up about 9% of U.S. food deliveries in April 2023. Uber Eats meanwhile accounted for 23% of deliveries, and DoorDash, about 65%.
The company will offer employees a minimum 16-week severance package, CNBC reports. Employees who are being laid off are expected to be notified on Monday, Migdal said.
“Rightsizing the business for where we are now — which includes ensuring we have the right resources and organizational structure focused on the right priorities — will allow us to be more agile, make bolder bets and take advantage of all of the opportunities on our doorstep,” Migdal said.