Meal delivery group Deliveroo to cut nearly 10% of global staff

SINGAPORE: Deliveroo will lay off a portion of its global staff, with roles at all levels of the company affected.

In an internal memo to employees seen by CNA, Deliveroo founder and Chief Executive Will Shu said that around 9 per cent of company's workforce, with approximately 350 roles cut, although the actual number of staff laid off is estimated to be about 300, after redeployments.

The announcement was an "extremely difficult" one to make, said Mr Shu, who wrote about the company's challenge to "balance continued growth and reaching profitability".

While Mr Shu did not state how the planned layoffs would affect its staff in Singapore, he mentioned the "record high inflation, rising interest rates, an energy crisis and fears of a recession" in the United Kingdom, where Deliveroo is headquartered.

He said that Deliveroo grew its headcount very quickly in recent years, in response to the rise in demand for food delivery amid the COVID-19 pandemic.

"By contrast, 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," said Mr Shu.

Deliveroo has grown rapidly since it was founded in London a decade ago, and its riders - who are not directly employed - are now a familiar sight in towns and cities in nine countries.

The company, which competes with Just Eat Takeaway and Uber Eats, has over the last year exited the Netherlands and Australia, markets in which it struggled to become a market leader.

Order numbers, however, slipped in its last quarter, even though their total value rose as restaurants increased prices.

"Quite bluntly, our fixed cost case is too big for our business.

"This is my responsiblity. I should have had a more balanced approach to headcount growth, but I thought stronger top-line growth would continue for longer than it has," Mr Shu said

Those affect by the layoffs will be offered "enhanced redundancy packages that go above government requirements and support" that might include redeployment opportunities and outplacement.

"The specifics will vary by market, but everyone who leaves us will be looked after," said Mr Shu.

The layoffs are the latest in a spree of job cuts in the realm of tech, including downsizes by Foodpanda and Chope.

Grab, Southeast Asia's biggest ride-hailing and food delivery firm said in September 2022 that the company did not expect to have to make mass layoffs, instead implementing cost-cutting measures.

CNA has contacted Deliveroo Singapore for more information, including the total number of people affected by the layoffs.

Deliveroo floated in March 2021 at 390 pence per share, valuing the company at about 7.6 billion pounds, but the stock has struggled to reach those levels since.

The shares have lost 40 per cent of their value over the last 12 months.