By Laura McGuire
Deliveroo has been forced to slash 350 job roles across all levels as it attempts to navigate a difficult economic outlook and a decline in take away sales post pandemic.
Will Shu, chief executive of the food delivery app, revealed the news to staff on Thursday – blaming high inflation, recession fears and a decision to over hire employees.
In a message to staff, Shu confessed that the company grew its headcount “very quickly” – a result of the Covid-19 pandemic which saw consumers lean heavily on takeaway services as restaurants were legally required to close.
In the summer, Deliveroo slashedits sales forecasts predicting that the rising cost of living would lead to a slowdown in consumer spending.
However, in January Deliveroo reported a seven per cent increase in gross transaction value globally for 2022, rising to £6.85bn, while the gross transaction value for its UK and Irish business was up nine per cent for the year to £3.8bn.
Despite this lift, the group also revealed that orders globally were down for the final three months of last year, falling by two per cent from 76.8m to 75.1m orders. At the time, Shu said he remained confident in the group’s ability to “adapt financially”.
It also follows the group’s disastrous £8bn listing in March 2021, which saw shares plunge 60 per cent last year.
Diana Gomes, consumer goods analyst at Bloomberg Intelligence said: “Demand may slow more than expected amid inflation and a possible UK recession, as some clients reduced or stopped ordering, and fewer joined last year after vouchers spending was curtailed for margin gains,”
Deliveroo joins a string of other companies which have been forced to cut job roles in an attempt to survive the challenging economic outlook.
On Wednesday, Ebay said it would also have to cut 500 staff roles. Additionally, another pandemic success Zoom revealed it was making around 1300 staff redundant.
City .A.M. has approached Deliveroo for a comment.
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