DoorDash has announced layoffs of 1,250 employees to bring down its operating costs which has exceeded its revenue.
In a post explaining the decision, CEO Tony Xu apologised to the affected employees for how the news was passed to them. It appears that it came before the company could tell them privately.
Xu said that the pandemic had brought opportunities that were both sudden and unprecedented, leading to speedy hiring.
“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 added.
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DoorDash had been reducing operating expenses that did not have to do with headcount but that was not enough to salvage its financial situation.
Impacted employees are to expect 17 weeks of compensation and their February 2023 stock vest. Also, they will continue to get healthcare until March 31, 2023. Immigrant employees who are in the country on DoorDash Visa have until March 1, 2023 to find a new job and extend their stay.
In addition, the company will create an opt-in directory for companies to reach workers and offer recruiting support to help them find their next job.
However, for affected workers in other countries outside the US, their compensation may be different but they will all be treated with respect and integrity.
Going forward, Xu says that he employees who remain should be optimistic about DoorDash future.
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