American food delivery company DoorDash, which launched aggressively in Australia in 2019, is cutting 1250 staff globally as the sector more broadly tries to stem potential financial haemorrhaging amid a global downturn in discretionary spending.
Company CEO Tony Xu broke the news to staff on Thursday, Australian time, saying it was “the most difficult change to DoorDash that I’ve had to announce in our almost 10-year history”.
Xu said the business “remains strong and continues to grow”, but in the wake of ramping up the business during the pandemic but at this point operating expenses would continue to outgrow revenue they didn’t make the cuts.
“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,” he wrote to staff in a memo.
The DoorDash boss said the business “has been more resilient than other ecommerce companies”, but growth has tapered.
“We have and will continue to reduce our non-headcount operating expenses, but that alone wouldn’t close the gap. This hard reality ultimately led me to make this painful decision to reduce our team size,” he wrote.
With UK rival Deliveroo quitting the Australian market last month, and going into voluntary administration, Menulog also cutting its workforce, the collapse of two local grocery delivery services, Voly and Send, the delivery market has been battered post lockdowns.
Contacted by Startup Daily, Doordash declined to comment on the impact of the job cuts on local staff, instead pointing to local success, adding: “Australia is an important part of our international business, which we see as a growth engine for DoorDash.”