Grubhub layoffs 2023: CEO announces mass layoffs, including Chicago office
CHICAGO -- Food delivery service Grubhub said Monday it is laying off about 400 workers, or 15% of its corporate staff.
Grubhub employs 850 at its Chicago headquarters and another 2,000 nationally. A spokesperson said the cuts in Chicago should be in line with the 15% reduction, indicating that around 120 layoffs are due locally. The layoffs do not impact drivers or employees at restaurants that work with Grubhub.
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CEO Howard Migdal announced the cuts in a companywide message, saying the "tough decisions" were necessary to stay competitive. He said workers would be notified of their terminations throughout the day.
"We operate in a highly competitive and constantly evolving industry, and we need to continually look at whether we are set up in the right way to deliver for our diners, restaurants and delivery partners," he said. "While our business has grown since our 2019 pre-pandemic levels, our operating and staff costs have increased at a higher rate."
He said the reductions will make the company more agile and better able to invest for growth. The company is expected to announce a new growth strategy soon.
"Grubhub is an incredible marketplace with tens of millions of customers, hundreds of thousands of restaurants and a strong logistics network operating from coast to coast," Migdal said.
But the company, owned by Amsterdam-based Just Eat Takeaway.com, continues to lose money and is up for sale. Last year, Just Eat Takeaway took a charge of $4.94 billion to write off the value of its 2021 acquisition of Grubhub, according to an earnings report.
A spokesperson said laid-off workers will get 16 weeks' severance, or two weeks for every year of service, whichever is greater, while also getting outplacement help.
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Migdal joined Grubhub earlier this year after serving as CEO of food delivery company SkipTheDishes in Canada that Just Eat Takeaway also owns.
Just Eat Takeaway is due to report half-year results next month. In its annual results for 2022, it reported a loss of about $6 billion, mostly to cover write-offs for its acquisitions. It said that at the end of 2022, it had cash or cash equivalents on hand of around $2.2 billion.
The company said then that results are improving and it has a strong capital position that includes access to a revolving credit line of about $430 million.
(Source: Sun-Times Media Wire - Copyright Chicago Sun-Times 2023.)
Source: WLS-TV
