DoorDash announces layoffs affecting 1,250 workers

DoorDash is laying off around 1,250 workers. The update, posted by DoorDash CEO Tony Xu, explains that the company grew too quickly during the covid pandemic, leading to an increase in operating expenses that could soon “outgrow” the company’s revenue.

“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,” Xu writes. “That’s on me. As a result, operating expenses grew quickly ... This hard reality ultimately led me to make this painful decision to reduce our team size.”

Xu adds that although DoorDash remained resilient during and after the covid pandemic, the company is not “immune” to the current economic challenges. It’s not clear which departments the layoffs hit the hardest.

Workers affected by the job cuts will receive 17 weeks of compensation in addition to their February 2023 stock vest. Employees will also continue to receive healthcare benefits through March 31st, 2023, and will gain access to a directory that allows other companies to contact and recruit them. For employees in the US on a visa, DoorDash will set the termination date for March 1st, 2023, so they have enough time to find a new job.