DoorDash, the on-demand delivery service, laid off 1,250 employees to rein in operating expenses amid a slump in sales. A DoorDash spokesperson confirmed the layoffs on Thursday. The company has experienced a significant decline in orders and transactions since it was founded six years ago.
In an effort to address this issue and return to profitability, DoorDash laid off a third of its workforce as of April 26th. DoorDash has laid off 1,250 people and cut the compensation of its remaining staff by 20 percent.
In an attempt to revamp its business model, DoorDash laid off 1,250 employees and cut the pay of the remaining staff by 20 percent. DoorDash was valued at $7.1 billion in its latest funding round, but it is experiencing steep competition from other delivery services such as Postmates and Amazon.
DoorDash faces stiff competition from Amazon and Postmates. Meituan-Dianping, a Chinese company that offers on-demand delivery services, is also posing as a threat to DoorDash.
DoorDash raised $535 million in its most recent round of funding from a group of investors led by Sequoia Capital. In the past year, DoorDash has lost four high-level employees including its vice president of business development and two vice presidents for product and legal.
In an interview with Bloomberg, DoorDash co-founder and CEO Tony Xu blamed the “anti-tech” rhetoric in Washington for the layoffs.
Mr. Xu said in an interview that he’s disappointed by President Donald Trump’s rhetoric toward immigrants on Twitter. Mr. Xu says the president’s tweets to ban Muslim immigrants and refugees prevent people from entering the country in search of a better life. Mr. Xu believes Trump’s policies have caused many immigrants to turn to Uber and DoorDash for on-demand delivery.
DoorDash could not provide a revenue figure for 2017, but it is expected to be lower than 2016.
DoorDash laid off 1,250 employees and reduced the compensation of its remaining staff by 20 percent because of competition from Uber and Amazon. DoorDash also faces competition from Chinese companies such as Meituan-Dianping that offer on-demand delivery services. By laying off 1,250 employees, DoorDash hopes to reverse the decline in its business and reimburse investors.
DoorDash co-founder and CEO Tony Xu blames the anti-tech rhetoric of President Trump for cutting down on immigration. He believes a Muslim ban prevents immigrants from entering the country in search of a better life. DoorDash provides delivery services to help immigrants who cannot live in a thriving economy. Mr. Xu believes that Trump’s policies are causing many immigrants to turn to Uber and DoorDash for on-demand delivery.