Deliveroo to cut hundreds of jobs as demand for takeaway softens

The rapid delivery service is planning to shed 350 jobs,  the equivalent of 9% of its global workforce, with employees in the UK to be worst affected. 

The cuts are expected to impact roles across all levels and an effort will be made to move staff to different areas of the business, in the hopes to keep around 300 employees.

A collective consultation process on the delivery service’s redundancy proposals will take place In the UK, but across all markets “enhanced redundancy packages that go above government requirements and support” will be offered. 

In a note to staff, Deliveroo founder Will Shu said the cuts were a necessary response to overhiring during the pandemic, increased competition and the impact of the cost-of-living crisis in the UK impacting demand.

“We operate in a highly competitive industry, and at the same time we are also in a difficult consumer environment in most of our markets,” he said.

“We are experiencing record high inflation, rising interest rates, an energy crisis and fears of a recession in the UK.”

Shu took responsibility for the overhiring and said he should have taken a “more balanced approach” to headcount growth. 

“In recent years, we grew our headcount very quickly. This was a response to unprecedented growth rates supported by Covid-related tailwinds.

“The world we operate in has changed. We now face serious and unforeseen economic headwinds. We have also recently exited markets, meaning we do not require the same size workforce to support our operations. Quite bluntly, our fixed cost base is too big for our business.”

In its most recent quarterly trading update, Deliveroo reported that it had broken even and expected to be profitable this year.

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