DoorDash Is Laying Off Over 1,200 Employees. Here's Why

During the COVID-19 lockdown, people began relying on services like DoorDash to deliver food from their favorite restaurants as many places shifted to a takeout-only focus. Paying a few extra dollars for the convenience of having someone else drop off your food became a highly appealing option during a time when many were concerned about leaving their homes. TechCrunch reports that DoorDash saw growth in several areas during this time, including the number of orders placed through the app, increased customer demand, more restaurants partnering with the app, and higher revenue overall.

As the demand for DoorDash grew, the company hired a large number of employees to accommodate that growth over on the corporate end (via DoorDash). Unfortunately, the company may not be able to sustain as many people now. As more restaurants have resumed in-person dining services, and the demand for food delivery has slowed, DoorDash has been facing some financial difficulties. DoorDash CEO, Tony Xu, announced on November 30 that the company will be laying off employees.

Employees will receive pay while searching for employment

In a letter sent to DoorDash employees, CEO Tony Xu explained that while the company grew rapidly during the lockdown, retaining the number of staff that are currently employed would not be sustainable for the company's future. The Verge reports that the company's operating expenses grew rapidly, and could potentially overtake the company's revenue. Ultimately, the higher-ups made the difficult decision to cut the number of employees.

An astounding 1,250 corporate employees will be relieved from their positions (via DoorDash). The message to employees began with Xu stating "This is the most difficult change to DoorDash that I've had to announce in our almost 10-year history." While apologetic, the announcement comes right in time for the holiday season, but Xu offers some comfort.

In order to make the transition easier, the letter states that DoorDash will continue paying affected employees for 13 weeks, in addition, they will receive a "lump sum" 4-week severance pay. These employees will also continue to receive healthcare benefits until the end of March 2023. 

To assist those attempting to find a new job, DoorDash will be setting up a directory for other companies to recruit employees. Those with visa applications will have a job termination date of March 1, 2023.