Deliveroo – a popular takeaway delivery platform – today announced that it is to cut hundreds of jobs globally.
The cuts are expected to affect 9 percent of their staff, meaning they will be cutting approximately 350 jobs.
It is understood that UK employees will be hit the worst by the job cuts.
Will Shu, the chief executive of the company, has stated that they will be offering “enhanced redundancy packages that go above government requirements and support.”
He also stated that roles “at all levels of the company will be impacted.”
The economic crisis plays a primary role
Mr Shu, has blamed the economic crisis as the primary reason behind the cuts, warning that they “now face serious and unforeseen economic headwinds. We have also recently exited markets, meaning we do not require the same size workforce to support our operations. Quite bluntly, our fixed cost base is too big for our business.”
Shu also stressed that inflation is at a 40-year high, as well as referencing soaring interest rates, “an energy crisis and fears of a recession in the UK.”
He adds:” In recent years we grew our headcount very quickly. This was a response to unprecedented growth rates supported by Covid-related tailwinds. By contrast, we now face serious and unforeseen economic headwinds. We have also recently exited markets, meaning we do not require the same size workforce to support our operations. Quite bluntly, our fixed cost base is too big for our business.”
What went wrong?
In 2022, the company stopped operating in both Australia and the Netherlands.
Deliveroo’s market value fell more than 40 percent in the past year.
After the company went public, its share price fell by a quarter, and was subsequently described as the worst initial public offering in London’s history.
Terry Payne, Global MD of Aspire, said:
“Nobody wants to see lay-offs, particularly in this economic climate. While lots of tech firms, globally, have reduced headcount in recent months, this isn’t necessarily a trend reflected across the entire space. We’re still noticing a very high demand for tech workers – both permanent and temporary – as employers continue to invest in and enhance their digital capabilities, which hold the key to seizing opportunities and operating with greater efficiency.”
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
