DoorDash shares collapsed on news of mass layoffs
2022.11.30 08:55
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DoorDash shares collapsed on news of mass layoffs
Budrigannews.com – DoorDash shares (NYSE:) are up more than 3% in pre-market trading after Bloomberg News reported that the CEO of the company, Tony Xu, informed employees of plans to cut 1,250 jobs.
According to the report, DoorDash will reduce its workforce worldwide and in the United States by approximately 6% in this manner. The objective is to reduce operating costs, which reached more than $2 billion in the third quarter.
Bloomberg reported that in a letter to employees on Wednesday, Xu wrote, “While our business continues to grow quickly, given how quickly we hired, our operating expenses – if left unabated – would continue to outgrow our revenue.”
DoorDash “will continue to reduce our non-headcount operating expenses, but that alone would not close the gap,” Xu continued. I ended up making the difficult decision to reduce the size of our team as a result of this hard reality.”
In order to accelerate its international expansion, DoorDash agreed to acquire Wolt, a European delivery service, for $8 billion last year.
In a memo to employees, Xu added, “We must maintain this level of discipline moving forward and act with the hunger, efficiency, and creativity of the younger startup we once were while leading with the responsibility of the market leader we have become.”
DASH shares are down nearly 65 percent year-to-date based on yesterday’s closing price.
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