Photo: Michael M. Santiago / Getty Images
DoorDash is the latest technology company to announce that it will lay off thousands of employees as part of a process of adjustment to operating costs that have skyrocketed.
The dismissal process will affect 1,296 corporate employees of DoorDash, confirmed its CEO, Tony Xu, in a message addressed to his work team this Wednesday.
The clipping planned is equivalent to 6% of the total number of employees that DoorDash had at the end of last November, the company detailed.
According to Xu, DoorDash needs to undertake a process of adjustment to costs that have increased outside the projections it needs to continue operating, so the only way was to cut its workforce.
Before DoorDash, companies like Amazon advertised There were layoffs at their work plants, in addition to Meta and others linked to the technology sector.
Why DoorDash needs to lay off workers
A significant portion of the high costs threatening DoorDash’s growth has to do with a workforce that exceeds the payment capacity of the company.
According to Xu, DoorDash hired too many people during the pandemic years of COVID-19, since at that time its exponential growth required it before a unusual increase in demand.
The DoorDash CEO acknowledged that while the company was delivering results, there were errors in the calculation that was made for the growth of the labor force during the time of the pandemic.
“Most of our investments are paying off. os and while we have always been disciplined in the way we managed our business and operational metrics, we were not as rigorous as we should have been in managing the growth of our team ”, explained the executive in the internal statement.
Xu acknowledged that this is an error that should be attributed to him, since it caused operating expenses to grow rapidly.
“This harsh reality ultimately led me to make this painful decision to downsize our team,” said the DoorDash CEO.
During the pandemic months, companies like DoorDash saw demand for their services skyrocket, which las led to record revenue, before millions of orders received daily.
Although the company’s earnings remain strong, with an au increase of 70% to $1,296 million dollars during the third quarter of the year, the problem that DoorDash faces has to do with losses.
Your costs have skyrocketed and loss has almost tripled from $700 million to $101 million in the last year.
Neil Saunders, CEO of GlobalData, noted that, overall, the company is moving along the path wrong: “all metrics are pointing in the wrong direction.”
“In simple terms, the company is now losing around 70 cents for each order you fulfill. This is a sharp increase in the 41 cents you were losing at the start of this fiscal year.” Saunders explained in a report for ABC News.
Finally, the CEO of DoorDash indicated that employees who are laid off will receive financial compensation equivalent to 19 weeks and your health benefits will continue until 41 March next year.
You may also like:
– Google may be preparing to fire 000,000 employees
– HP announces layoffs of up to 6, workers globally as part of his “transformation plan”– How the wave of mass layoffs in Silicon Valley mu Avoid the errors of giants like Twitter, Facebook or Amazon