Doordash To Lay Off 1,250 Of Its Corporate Employees

In an effort to cut costs, DoorDash is letting go of 1,250 people, CEO Tony Xu told employees in a message on Wednesday.

Xu thinks the pandemic allowed merchants and customers never-before-seen opportunities to cooperate together. DoorDash accelerated hiring to meet demand.

Xu says that the company did not do a good job of managing team growth, even though most of its investments are paying off.

Xu says that because of how quickly DoorDash hired people, operating costs would continue to grow faster than sales growth if the company didn't do something about it.

He went on to say that the business of DoorDash is more stable than the business of other e-commerce companies.

"This was not an easy choice for me," Xu wrote. "We have and will continue to cut our operating costs that don't involve people, but that won't be enough to close the gap.

"Because of this harsh reality, I was ultimately forced to make the difficult choice to cut the size of our workforce."

When an employee is let go, they will get 13 weeks of pay and a lump-sum payment for the last four weeks.

Xu's memo also says that affected workers will get their stock vests in February 2023. The termination date for visa-sponsored workers is March 1, 2023.