DoorDash Cuts Workforce by 1,250 Employees

On Wednesday, DoorDash CEO Tony Xu informed employees that the delivery service is letting go of 1,250 corporate workers as part of an ongoing effort to reduce costs. This is due to a decrease in growth and an excessive amount of hiring.

Stock prices rose by approximately 3% in the premarket following the announcement.

DoorDash has joined a number of tech companies, such as Amazon, Meta, Twitter, HP, and Lyft, in making job cuts. During the pandemic, the tech industry saw a surge in hiring, but this has been drastically reduced in recent months due to the decrease in consumer demand and investor confidence caused by low interest rates.
At the end of 2021, DoorDash had 8,600 corporate employees, however, earlier in the year they announced a decrease in hiring.

At the end of 2020, DoorDash had a highly successful initial public offering (IPO) that saw its stock prices increase by 80% over the initial pricing. By November 2021, the company had reached a peak valuation of $81.1 billion, even though it had yet to make a profit.

DoorDash has announced that they will provide 17 weeks of severance to employees who are affected. Healthcare will be available until March 2023. For those who are overseas or visa-sponsored, the termination date will be March 1, which will give them ample time to find a new job. Additionally, those with H1-B visas will have until March 2023 to find a new opportunity, giving them the maximum amount of time to do so.

Since the beginning of the year, DoorDash's stock has dropped by more than 60%.