Grubhub Will Lay Off 15% Of Staff To Compete With Rival Delivery Sites

In an early morning message to staff on Monday, June 12, Grubhub CEO Howard Migdal informed employees that about 15% of staff (approximately 400 workers) would be laid off throughout the day. Migdal primarily cited competition and long-term goals for success as the reasons for the workforce cuts.

"There is no doubt whatsoever that we have a solid foundation in place and an immense opportunity ahead of us – but it is also clear that we need to make some tough decisions in order to maintain our competitiveness, deliver the best possible service for diners and our other partners, and be successful for the long-term," said Migdal in the message that was also posted on Grubhub's website.

A report published by Bloomberg in May, which detailed the market share of food delivery sales by various companies throughout the month of April, placed Grubhub nearly at the bottom of the list at only 9%, an eight-point drop from just two years prior. The same report shows fairly flat growth over the last several years. Meanwhile, competitors like DoorDash and Uber Eats clocked in at 65% and 23%, respectively in April of this year and have demonstrated growth over the same two-year period.

Grubhub's background and future

Founded in the early aughts by Matt Maloney and Mike Evans, Grubhub became one of the first successful online meal delivery services, filling a gap in the food-delivery industry. Approximately 10 years later, in 2014, the company went public. However, Grubhub appears to have had a rocky last few years.

In 2021, the Dutch company Just Eat Takeaway (JET) acquired Grubhub and in the same year, Maloney stepped down as CEO. The company's CFO, Adam DeWitt, stepped into the role when Maloney vacated it, but resigned just months ago, at which point JET appointed Migdal to the position. Meanwhile, there is speculation that JET may sell Grubhub, given that its stock has fallen 70% since it acquired the food delivery service.

Still, Migdal remains optimistic that Grubhub can be successful in navigating the food delivery market with the right strategies and execution in place: "From everything I have learned in the last 15 years in the online food industry and over the past few months at Grubhub, I have so much confidence in our ability to succeed."