Deliveroo Plc said it plans to cut 350 jobs, or about 9% of its workforce, as the company focuses on profits and a way to deal with a “difficult consumer environment.”
The cuts will affect roles at all levels, although some employees may be redeployed, Chief Executive Officer Will Shu said in an announcement to staff on Thursday that was posted on the company’s website.
Shu has been scaling back the company, exiting markets and moderating growth plans as he works to make the London-based food-delivery business more profitable. Expansion at delivery companies surged during the Covid-19 lockdowns, when customers were stuck at home and restaurants and shops were shut. Many are now having to cut costs with order growth slowing more than anticipated.
“In recent years we grew our headcount very quickly. This was a response to unprecedented growth rates supported by Covid-related tailwinds,” Shu said. “We now face serious and unforeseen economic headwinds.”
Shu, who cited inflation, rising interest rates, an energy crisis and “fears of a recession in the UK” as reasons for extra caution, said he expected revenue growth to continue for “longer than it has.”
Delivery Hero SE reported Thursday that its gross merchandise value, a measure of customer orders, last quarter grew less than analysts had estimated and the German delivery company blamed inflation and restaurant reopenings for a difficult operating environment.
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Deliveroo shares fell 1.6% to 87.50 pence ($1.40) at 2.40pm in London. The stock has declined 41% in the last 12 months.
