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Deliveroo to cut hundreds of jobs globally with UK to be worst hit

Deliveroo

Deliveroo to cut hundreds of jobs globally and the UK to be worst hit

Deliveroo has announced it is cutting 350 jobs and staff in the UK are likely to be hardest hit.

The cuts will affect people around the world but founder but it is thought UK employees will be the hardest hit.

Some employees will be transferred to other areas of the business in an effort to limit job losses to around 300 positions, while a redundancy process will begin across the company.

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The majority of employees are based in the United Kingdom.

A collective consultation process on Deliveroo's redundancy proposals will take place in the United Kingdom.

Mr. Shu said "enhanced redundancy packages that go above government requirements and support" will be given.

He added the specifics will vary by market.

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Mr. Shu also said the company needed to "go further" to become profitable as the COVID-era surge in takeaway orders on the platform faded.

According to the company's most recent quarterly results, released last month, it broke even and expects to be profitable this year.

Cost-cutting measures and higher customer fees aided financial performance after order numbers fell from pandemic highs: orders fell two percent, but this was offset by higher restaurant prices.

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The job cuts have been attributed to competition in the delivery sector as well as global economic conditions.

Mr. Shu said: "We operate in a highly competitive industry, and at the same time we are also in a difficult consumer environment in most of our markets."

"We are experiencing record high inflation, rising interest rates, an energy crisis and fears of a recession in the UK."

As with many tech companies and start-ups, Deliveroo said it hired rapidly during the pandemic and is now downsizing.

READ MORE: ASDA PUTS ALMOST 300 JOBS AT RISK IN CHANGES TO OVERNIGHT ROLES

Mr. Shu said: "I’m sorry that we have to do this.

"Some of our close friends and talented colleagues will leave Deliveroo as part of this and it pains me that we have to do it.

"I have been through one of these processes once before.

"I said then that it was the hardest thing I’d ever done, and this is just as bad.

"But however much it pains me, I know it’s nothing compared to how those impacted will be feeling. We will do everything to support you.

"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.

He added the cuts were his fault and that he ought to have "had a more balanced approach to staff increase."

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He admitted: "Quite plainly, our fixed cost base is too big for our business

"The cost-cutting initiatives implemented during the fourth quarter of 2022, which included shutting down loss-making operations in Australia and the Netherlands, were insufficient."

Deliveroo uses gig economy workers, who are not classified as employees and are therefore exempt from the headcount reduction, to deliver takeaways.

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