DoorDash cuts 1,250 jobs after pandemic hiring surge

Nov 29, 2022, 4:53 PM | Updated: Nov 30, 2022, 10:28 am
FILE - In this Feb. 27, 2020, file photo, the DoorDash app is shown on a smartphone in New York. Do...

FILE - In this Feb. 27, 2020, file photo, the DoorDash app is shown on a smartphone in New York. DoorDash is cutting more than 1,200 corporate jobs, saying it hired too many people when demand for its services increased during the COVID-19 pandemic. Tony Xu said in a message to employees on Wednesday, Nov. 30, 2022 that DoorDash was undersized before the pandemic and sped up hiring to catch up with its growth. (AP Photo, File)

(AP Photo, File)

DoorDash is eliminating about 1,250 corporate jobs, or about 6% of its workforce, saying it hired too many people when delivery demand surged during the COVID-19 pandemic.

CEO Tony Xu said in a message to employees Wednesday that DoorDash was undersized before the pandemic and sped up hiring to catch up with its growth.

“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,” Xu wrote. “That’s on me. As a result, operating expenses grew quickly.”

The company is seeking to lower its operating costs, Xu said, but it was unable to bring spending in line without job cuts.

“This hard reality ultimately led me to make this painful decision to reduce our team size,” Xu said.

DoorDash and other start-up delivery services posted record revenue during the pandemic with millions sheltering at home. Profits are another story, however.

DoorDash said early this month that revenue rose 33% to $1.7 billion in the third quarter, but costs also ballooned and it almost tripled its losses from $101 million during the same period last year, to $296 million in 2022.

“Put in simple terms, the business is now losing around 70 cents for each order it fulfills. This is a sharp increase in the 41 cents it was losing at the start of this fiscal year,” said Neil Saunders, managing director of GlobalData. “All the metrics are pointing in the wrong direction.”

Impacted employees will receive 17 weeks of compensation and their February 2023 stock vest. All health benefits will continue through March 31, 2023.

DoorDash is among several companies to announce job cuts recently. Others include Twitter, Amazon, Facebook parent company Meta and H&M.

Shares of DoorDash Inc. rose almost 5% Wednesday.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

The logo for OpenAI, the maker of ChatGPT, appears on a mobile phone, in New York, Tuesday, Jan. 31...
Associated Press

Cheaters beware: ChatGPT maker releases AI detection tool

ChatGPT is trying to curb its reputation as a freewheeling cheating machine with a new tool that can help detect if artificial intelligence wrote it
1 day ago
Indian Finance Minister Nirmala Sitharaman, in red, leaves her office for President's house before ...
Associated Press

India finance minister announces new clean energy funds

BENGALURU, India (AP) — Indian finance minister Nirmala Sitharaman announced several new clean energy initiatives in the government’s annual federal budget speech on Wednesday, saying “green growth” is a top priority for the country. More than $8 billion dollars were announced for projects like mangrove restoration which help suck carbon dioxide out of the atmosphere, […]
1 day ago
Associated Press

Polish leader donates to Ukraine army to end defamation case

WARSAW, Poland (AP) — The Polish ruling party leader, Jaroslaw Kaczynski, has paid 50,000 zlotys ($11,500) to the Ukrainian army to settle a defamation case with a political rival. Kaczynski was ordered by a court in December to pay Radek Sikorski more than 700,000 zlotys ($162,000) to cover the costs of publishing an apology for […]
1 day ago
A man on his tricycle carries transports vegetables at a wholesale market in Guwahati, India, Wedne...
Associated Press

India to raise spending on job creation ahead of election

NEW DELHI (AP) — Prime Minister Narendra Modi’s government presented to Parliament on Wednesday an annual budget of $550 billion that calls for ramping up capital spending by 33% to spur economic growth and create jobs ahead of a general election next year. Finance Minister Nirmala Sitharaman said private investment was rising after the pandemic […]
1 day ago
FILE -- Supporters wave Austrian flags during the final election campaign event of the right-wing F...
Associated Press

Austria’s far-right Freedom Party regains national momentum

BERLIN (AP) — Nearly four years ago, Austria’s populist far-right Freedom Party was ousted from the national coalition government over a major corruption scandal, and voters punished it at the ballot box. But the party’s nearly double-digit gains in Sunday’s regional election in the province of Lower Austria confirmed a political trend on the national […]
1 day ago
FILE -- Beer bottles are filled at the Veltins beer brewery in Meschede, Germany, Wednesday, Aug. 2...
Associated Press

German beer sales up in 2022 after COVID pushed them down

BERLIN (AP) — German beer sales rose in 2022 after COVID-19 restrictions weighed on brewers in the previous two years, but the long-term trend remains downward and the World Cup soccer tournament in Qatar didn’t get the taps flowing, according to official figures released Wednesday. The Federal Statistical Office said that German-based breweries and distributors […]
1 day ago

Sponsored Articles

safety from crime...

As crime increases, our safety measures must too

It's easy to be accused of fearmongering regarding crime, but Seattle residents might have good reason to be concerned for their safety.
Comcast Ready for Business Fund...
Ilona Lohrey | President and CEO, GSBA

GSBA is closing the disparity gap with Ready for Business Fund

GSBA, Comcast, and other partners are working to address disparities in access to financial resources with the Ready for Business fund.
SHIBA WA...

Medicare open enrollment is here and SHIBA can help!

The SHIBA program – part of the Office of the Insurance Commissioner – is ready to help with your Medicare open enrollment decisions.
Lake Washington Windows...

Choosing Best Windows for Your Home

Lake Washington Windows and Doors is a local window dealer offering the exclusive Leak Armor installation.
Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
DoorDash cuts 1,250 jobs after pandemic hiring surge