The Wall Street Journal reports that food delivery company Grubhub is eliminating about 400 positions within the company, or about 15 percent of its workforce, as it "seeks to reduce costs to stay competitive."
“While our business has grown since our 2019 prepandemic levels, our operating and staff costs have increased at a higher rate,” CEO Howard Migdal said in an email to staffers yesterday.
Grubhub is owned by Dutch food-delivery company Just Eat Takeaway.com, which is said to be considering the possibility of a strategic partner for Grubhub, or a sale of part or all of the business.
Some context from the Journal:
"Companies across a range of industries have announced layoffs this year as they look to cut costs and shift priorities amid concerns about a slowing economy. Job cuts initially pursued by technology companies have since shifted to retailers, manufacturers and consumer companies.
"Food-delivery companies’ sales surged early in the Covid-19 pandemic, though growth has since plateaued as customers resume eating out at restaurants. Some restaurants have noticed a slowdown in delivery growth as consumers watch their spending, because it is more expensive for couriers to shuttle food on demand than it is for diners to pick up meals or eat at restaurants.
"Grubhub, which market-research firms estimate is the third-largest U.S. food-delivery company, after DoorDash and Uber Eats, has sought to remain competitive in a category it once led. Grubhub last year struck a deal with Amazon.com to link part of Grubhub’s food-ordering service with the e-commerce company’s Prime program. The companies announced the extension of the deal last week."
- KC's View:
Look for some sort of sale.