SAN FRANCISCO (KRON) — Food delivery company DoorDash announced it would be laying off 1,250 employees, DoorDash CEO Tony Xu announced in a letter to staff on Wednesday.
Xu said he understood the news would be shocking for many of those at the company, especially in light of the fact that DoorDash’s “business remains strong and continues to grow.”
This is the most difficult change to DoorDash that I’ve had to announce in our almost 10-year history…If you are among those impacted, I am truly sorry and I apologize to have some of you wake up to this news as opposed to reading it during more normal hours.DoorDash CEO Tony Xu
Xu described the rapid growth that the San Francisco-based company experienced during the pandemic, due to changing consumer needs and the company’s unique ability to meet them. But Xu says the operational expenses of the company grew very quickly.
Though the company is benefitting from its growth, Xu says, “we were not as rigorous as we should have been in managing our team growth. That’s on me.”
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The CEO shared that the company has seen less growth as the pandemic has slowed, and operating expenses could soon exceed the revenue that the company is bringing in. Xu says those realities brought him to the “painful” decision to lay off such a large chunk of the DoorDash team.
Xu also shared details about what support the former DoorDash employees would be receiving from the company. Impacted employees will be provided 17 weeks of pay and access to a stock vest in February of 2021. DoorDash will also be provided health benefits through March of 2023, and COBRA coverage will be offered after that date.
The announcement says the termination date will be set for March 1, 2023 so those employees who have visa applications will have more time to find a role at another company. The DoorDash CEO also said that all employees could opt in to a recruiting support directory.