Deliveroo has cut 350 jobs in response to a tech downturn, and the drop in take-out orders.
The company’s chief executive Will Shu announced the news to employees on Thursday. He pointed to the high cost of living and said he was responsible for hiring too many people in the past.
These cuts represent approximately 9pc of the company’s workforce. The company stated that it expected 50 people to be redeployed into new roles within the company.
These cuts are two years after the disastrous PS8bn London listing. They are the latest in a series of job losses at tech companies . They were blamed for over-optimistic hiring during a pandemic tech boom.
Deliveroo stated last month that takeaway orders had dropped by 2pc compared to a year ago, but that the order value had increased. In the face of difficult economic conditions, Deliveroo has been forced to leave Australia and the Netherlands.
Since March 2021 ‘s listing, the shares have dropped by nearly 80 percent. This was a major London listing in recent years. The company’s growth has slowed since then and it has been under pressure to make profit.
In an email to employees, Mr Shu stated that “In recent years we have grew our headcount extremely quickly.” This was due to the unprecedented growth rates that were supported by Covid-related tailwinds. We now face significant and unanticipated economic headwinds.
“We also recently exited certain markets, which means that we don’t require the same workforce to support our operations. Our fixed cost base is simply too large for our business.
“This is my responsibility. I should have taken a more balanced approach in headcount growth. However, I believed that stronger top-line growth could continue for longer periods of time than it has. I didn’t anticipate the many macro headwinds that would arrive at once. This is my fault, and I won’t make the same mistakes in the future.”