DoorDash To Layoff About 1,250 Employees

(RTTNews) - DoorDash (DASH) on Wednesday announced its plans to lay off about 1,250 corporate employees, thus becoming the latest tech company to reduce workforce in recent weeks.

The cuts represent about 6% of DoorDash's staff. DoorDash CEO Tony Xu shared the layoff news in a memo send to employees, which was later shared on its website.

"This is the most difficult change to DoorDash that I've had to announce in our almost 10-year history. Today, we are reducing our corporate headcount by approximately 1250 people and saying goodbye to many talented teammates. If you are among those impacted, I am truly sorry and I apologize to have some of you wake up to this news as opposed to reading it during more normal hours," Xu wrote.

Xu also explained how the company reached the decision to layoff some employees.

According to Xu, post-pandemic the company sped up its hiring to catch up with its sudden growth and "started many new businesses in response to feedback from audiences." This resulted in higher operating expenses, which is expected to "outgrow" revenues if left unabated.

"This hard reality ultimately led me to make this painful decision to reduce our team size," Xu explained.

The company said affected employees will get 17 weeks (13 weeks + 1 four-week lump sum severance pay) of compensation, as well as February 2023 stock vest.

All health benefits will also continue through March 31, 2023. Thereafter, employees will be able to opt in and pay for COBRA coverage for up to 18 months.

DASH is currently trading at $55.65, up $2.31 or 4.34%, on the NYSE.