Deliveroo is cutting about 9% of its workforce in a bid to reduce costs and “accelerate a clear path to profits”.
The redundancy process for 350 roles has been started, affecting jobs “at all levels of the company”.
Deliveroo CEO Will Shu said the company must demonstrate its route to profit, “by which I mean generating ‘free cashflow’ with our revenues exceeding all of our costs on a sustainable basis”.
“Quite bluntly, our fixed cost base is too big for our business,” he added.
Shu said the company had grown its headcount in recent years “very quickly” in response to “unprecedented growth rates supported by Covid-related tailwinds”. However, “serious and unforeseen economic headwinds” had prompted the move.
“This is my responsibility. I should have had a more balanced approach to headcount growth, but I thought stronger top-line growth would continue for longer than it has, he said. ”I did not anticipate so many macro headwinds arriving all at once. This is on me, and I will not be making the same mistakes.”
In its latest results, Deliveroo reported a 2% drop in orders globally in the fourth quarter of last year versus the same period in 2021. In the UK alone they were flat.
In October, it confirmed it was pulling out of the Netherlands and in November it ceased operations in Australia.
The exiting from these markets also meant the company did not require the same size of workforce to support its operations, Shu said.
“The objective of today’s proposed changes is to deliver a permanent shift towards increased efficiency, reduced friction in our structures and increased speed of decision-making to enable us to navigate an uncertain period and emerge in a stronger position,” he added.
No comments yet