DoorDash Cuts Staff by 1,250 To Rein in Costs

DoorDash is reducing its corporate staff by about 1,250, or 6% of the company, as the food-delivery platform works to rein in costs after a pandemic-fueled growth spurt, according to an internal memo from Chief Executive Tony Xu. WSJ: DoorDash is the latest among a swath of technology companies to cut staff to pare back costs as rising interest rates and economic uncertainty spur investors to focus more on profitability. DoorDash, like many companies, is also navigating shifting consumer habits as trends normalize from pandemic disruptions. The company's food-delivery competitors, such as Uber face their slowest growth in years.

"We were not as rigorous as we should have been in managing our team growth," Mr. Xu said in the memo, which was viewed by The Wall Street Journal. "That's on me. As a result, operating expenses grew quickly." Growth has tapered from pandemic highs, Mr. Xu said, and operating costs would continue to outpace sales growth if left unaddressed. Since its 2020 initial public offering, DoorDash has struggled to turn a profit, though it did post a profitable quarter at the start of the pandemic. Earlier in November, DoorDash posted a wider-than-expected loss of $296 million for the third quarter as costs surged 46% to over $2 billion.

They are trading h-1bs

[rsilvergun]

So about half of these tech companies staff are h1b's that have to have a job within 60 days of a layoff. By doing coordinated layoffs they can pick up and trade each other's h-1bs and hire them at lower wages. This also has the added benefit of depressing wages in the industry overall.

And because you're doing it to h-1b's there's unlikely to be a class action lawsuit.

Right about now would be a good time to have unions. But every single tech worker I've ever known no matter how low on the totem pol

Re:

[dbialac]

And yet you support unions (as do I). The idiot tech workers you speak of think their managers don't know what they're doing because they don't know what managers do. I actually had one say that the VP does the same thing he does, as if coming up with a budget is the same as making an update to a website.

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[drinkypoo]

I've had managers who provably didn't know what they were doing, a few who clearly did, and a bunch about whom I am still not sure. Never did whether my manager had a clue influence whether I thought I needed a union or not.

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[DrMrLordX]

Or maybe just dial back h1b numbers? Unions can't do anything about the dilution of the labor pool.

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[thegarbz]

So about half of these tech companies staff are h1b's that have to have a job within 60 days of a layoff.

You better provide a citation for that. It's important, because right now you look like a nutbag whose tinfoil hat is tuned to the wrong frequency and letting the gubmint mind control waves in.

and soon the drivers may be W2 and not 1099

[Joe_Dragon]

and soon the drivers may be W2 and not 1099 so they need to cut high paid staff so they can pay for more min wage people.

"That's on me"

[war4peace]

Mr. Xu said "That's on me".
How exactly is it "on him"? Would he step down and donate his fortune? Would he jail himself? Would he perform any relevant action that would meaningfully help the people he laid off?

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[thegarbz]

There's a big difference between admitting fault and paying recompence. It's nice and refreshing to see someone do at least one of the things in a world where everything is someone else's fault. Babysteps.

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[war4peace]

My point is it costs nothing and has no consequence, therefore saying it or not is just as relevant/irrelevant.

They're also sending druggies

[reanjr]

They also seem to have lowered the standards for their delivery people. Every other delivery person now looks like they smoked meth before their shift and they no longer have the ability to deliver drinks with your food.

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[timeOday]

If unemployment goes up, the quality of drivers will almost certainly go up. During the Great Recession the quality of our local McDonald's was appallingly good - all the workers were these highly-educated well-spoken millenials who definitely belonged in better jobs.

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[Petersko]

What pool of people do you think delivery services are drawing from? Go start a restaurant, and hire some delivery drivers. Perhaps you'll wait to make a decision until the neurosurgeon philanthropists come through the door... but maybe not? If you get a multi-tasking Uber driver, that's your best case.

Re: They're also sending druggies

[reanjr]

I would hope they are pulling from the same pool as pizza and cannabis delivery. Those delivery drivers are professionals. But they're not pulling from that pool. They're pulling from the pool of homeless people with bikes.

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[ArchieBunker]

Almost as if you get what you pay for. You pay low wages and get low quality in return.

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[AmazingRuss]

But he's entitled to so much better! He fell out of a vagina and landed in America!

Re: They're also sending druggies

[reanjr]

I can see that the driver is making approx. $20/hr in tips to deliver my food. That's on top of the $6-9 delivery fee.

I absolutely paid for better. I know this because companies like Dominoes can provide good delivery service at similar rates.

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[jwhyche]

This is one of the reasons we stopped using door dash. The quality of the service just went down hill. We got open bags and finally our orders just started vanishing.

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[thegarbz]

They also seem to have lowered the standards for their delivery people.

Since when have delivery drivers had standards based on looks? The people working in the gig economy here have always been the lowest income earners. Not sure why you think this is a new trend. I also don't know why you think that someone who looks like they smoked meth shouldn't have a job at door dash.

Do chiselled abs and perfect square chin make your food taste better?

Re: They're also sending druggies

[reanjr]

I'm not talking about having standards for looks. I'm talking about having background checks for people you are sending to your customers homes.

Reducing Fees then?

[OfMiceAndMenus]

So does this mean the service fees that stop me from using their god-awful service will come down from 25%? Or that some of the fee money will actually make it to the dashers?

Because if not, still fuck them.

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[BroccoliKing]

I concur with the awful service. Papa John's uses them to deliver pizza if you pay with a credit card, something I did not know, and their delivery driver just tossed the pizza on the porch and left. I had no idea it had been delivered and ended up with some stone cold pizza.

RE: Awful service

[King_TJ]

I posted already on this topic... but as a long-time "Dasher"? I'm real familiar with doing Papa John's pizza deliveries as some of the orders I get.

First off? It was my understanding that Papa John's (at least in my area) was only using Door Dash for the deliveries when people wanting delivery were located outside their delivery area. Every one of them I've had to do went to the opposite end of town where I imagine they weren't willing to deliver to themselves.

But second? Door Dash drivers, as a rule, kno

Massively Too Large

[crow]

If 1260 is 6%, then that means Door Dash has about 21,000 corporate employees. I assume this doesn't include the people who do the deliveries. Why would they need anything like this? I would think an app-based business like this could do just fine with more like 100 people. What in the world would require 21,000 people to run their business?

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[AmazingRuss]

I have a suspicion that when money is plentiful, these tech companies try to hire up all the talent so their competitors can't use it. In lean times, they lay off the people they think are the lowest performers.

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[hebertpa]

I was wondering about this also. All of these firms have huge staffs and they are software companies. The company I work for has 3 it people. Door Dashes code is not 7000 times more complicated than my code.

Re:Massively Too Large

[thegarbz]

If 1260 is 6%, then that means Door Dash has about 21,000 corporate employees.

I'm not sure where the number comes from but Door Dash has under 7,000 employees. They have 900,000 registered drivers.

Why would they need anything like this? I would think an app-based business like this could do just fine with more like 100 people.

But numbers aside you're actually completely delusional. You're talking about a company that has offices on all continents. On top of maintaining an app and a database it needs to coordinate with merchants as well as payment processors, it needs to comply with legal requirements of multiple different countries, some of them quite complex. You need production and logistics (you don't think every driver made their own doordash branded heatbag do you?) You need HR, management, marketing, finance, legal, as well as a whole host of additional services to manage the 900,000 drivers including managing complaints (which could easily consume 1/4 of the full time staff you listed given they service a market of close to 1bn people).

I've been driving for them for over 2 years now ..

[King_TJ]

And here's the thing? Door Dash has a completely unsustainable business model that was probably designed for a profitable buy-out, vs a sane expectation it was viable long-term.

They charge huge markups on food deliveries to customers, who then (rightfully!) assume drivers are being well compensated. But no... drivers are literally being paid less than their "wear and tear" costs to drive their vehicles around. The optional tips people add on orders are the ONLY way driving for Door Dash makes financial sense for a driver!

I approach Door Dash as the "gig" work it is.... I have a good full-time job already, so this is just extra cash for me when I have spare time to drive around and I've got nothing better to do. But it's amazing how often I wind up just rejecting every single delivery offer that comes in to my phone, because they make no financial sense to do!

I have a basic "rule of thumb" that a delivery needs to pay me enough so I'm getting at least $1 per mile they want me to drive (and I'm not going to bother at all if the total payout is less than about $4.50-$5.00. Because even if I only had to drive a block for one of those? It's about the time it'll take me waiting for the order at the restaurant too.) Sadly, I *often* get delivery orders where they're offering maybe $6.00 to drive 10.1 miles, or only $2.75 to bring someone McDonalds or Taco Bell that's 2-3 miles from the restaurant.

The other challenge with Door Dash that some people don't consider is that VERY often, a food delivery you do takes you outside the "prime" area you need to be in to get the next order. Door Dash isn't going to compensate you a single cent for the driving you have to do to get back from the last delivery drop-off to where the restaurants are. So the money you're offered to drive has to cover that return mileage too, really.

On top of all of this? There are other battles going on between Door Dash drivers and restaurants they pick up from. For example, many places expect drivers to fill the drink cups on orders. (Raising Canes and KFC are notorious for it.) The restaurant workers don't want to be bothered to fill soda or iced tea drinks for drivers so they just hand you the empty cups. Problem is, that's a health code violation because the restaurant can't guarantee a driver has washed their hands, etc. (And that also means there's no sticker sealing the top of the cup to guarantee nobody else stuck a straw in it and drank out of it.) I usually just make the drinks when this happens so I can get on my way and get paid. But honestly? If a health inspector ever sees that happening, that restaurant will be in serious trouble.

So when customers complain about the poor quality of drivers out there? Keep all of this in mind. It's really not attracting many people who will take the job seriously.

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[AlbatrossCoffeeSea]

I use to drive for them a bit before I graduated uni and what you are saying is spot on and adds a lot to the discussion hearing from someone who has driven for them. Never had the situation where I had to fill up someone's cup up though. Around my area I would get offered an order to drive 10-15 miles across the river for like 8$ and then have to trek back if I did take that order, like you mentioned. This situation adds up to 8$ an hour (which is much less when you factor in gas, wear and tear). I had a j