DoorDash is laying off about 1,250 employees in an effort to reduce rising operating expenses, CEO Tony Xu told staff early Wednesday. The move will impact roughly 6% of its workforce.
DoorDash was one of the early pandemic bets, as consumers turned to food delivery in an effort to slow the spread of coronavirus. During that time period, DoorDash rapidly grew its business and, subsequently, its work force.
But Xu said that he should have been stricter when it came to managing corporate headcount. “That’s on me,” he said. “While our business continues to grow fast, given how quickly we hired, our operating expenses—if left unabated—would continue to outgrow our revenue.”
The company is hoping the cuts, along with broader non-headcount measures, will rein in operating expenses. In its most-recent earnings report, DoorDash reported a larger-than-expected net loss of $296 million, which it said was partly attributable to stock-based compensation and a hiring increase.
DoorDash isn’t alone when it comes to belt-tightening measures in tech. Lyft, Amazon, Meta, and several other tech peers have recently announced staff cuts as they brace for a potential economic downturn.
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