Grubhub, the food delivery platform, has implemented workforce reductions by laying off approximately 400 employees, which accounts for 15% of its corporate staff. The company's CEO communicated the decision in a message to employees on Monday, explaining that the layoffs were necessary to uphold their competitiveness.
Grubhub has announced that it will provide a minimum of 16 weeks of severance to its employees. However, the company has not provided details regarding the specific groups or positions that were impacted.
“There is no doubt whatsoever that we have a solid foundation in place and an immense opportunity ahead of us — 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,” CEO Howard Migdal said in his memo.
Research conducted by Bloomberg Second Measure revealed that the company has faced challenges in gaining market share, significantly trailing behind competitors like Uber Eats and DoorDash.
In 2021, the Dutch multinational Just Eat Takeaway.com acquired Grubhub, a former publicly traded company, through an all-stock transaction. The deal valued Grubhub at $7.3 billion.
Shortly after less than a year since the completion of the deal, Just Eat Takeaway announced its exploration of a "partial or full sale" of Grubhub. When contacted by CNBC, a spokesperson for Grubhub did not provide an immediate response regarding any potential connection between the layoffs and the ongoing sale process.