DoorDash CEO Tony Xu announced this morning that the food delivery service will reduce its corporate workforce by 1,250 people. According to Xu’s November 30 message to DoorDash employees, the payroll deductions come although DoorDash “remains strong and continues to grow.” Xu stated that, following the pandemic’s overtly rigorous team growth, DoorDash experienced rapidly mounting operating expenses post-COVID. High personnel costs incurred during the pandemic are a common denominator in the layoffs sweeping across various corporations.
The CEO said that his company is “not immune” to the current economic climate and challenges, noting that the pandemic era’s exponential growth has slowed — and that operating expenses would exceed profit if precautions were not taken. According to Xu, efforts have already been made to cut spending outside of employee livelihoods.
According to the statement, DoorDash will assist the laid-off workers with career transition and recruitment. Employees affected will receive severance pay for just over four months, besides the quarterly employee stock vest in February. According to Xu’s memo, health insurance and benefits will be available until the end of March, and COBRA coverage will be available for an additional 18 months. The termination date for international visa-holding employees has been set for March 1 of next year to allow adequate time for job hunting and relocation.
While it’s no consolation, the DoorDash employees who are out of work during the holiday season are not alone. Meta, Amazon, Twitter, Lyft, and HP all caught the downsizing bug, with layoff numbers that paled compared to DoorDash’s. Amazon is laying off about 10,000 employees across multiple departments, including Alexa, which has been a struggling branch of Amazon for some time. Meta confirmed sweeping layoffs earlier this month, with the totals amounting to 13% of the tech giant’s payroll.
The slowing momentum in consumer spending power, fear of a looming recession, and continued inflation are largely to blame for tech layoffs. Twitter’s workforce downsizing is decidedly less structured — with all the organization of a shaken jar of hornets, it appears — but among the most recent news is Twitter dismissing thousands of freelancers and contractors after already laying off about 4,000 regular employees.