Deliveroo to cut 300 jobs amid inflation, interest rates, and UK recession fears

Deliveroo's shares have lost 40% of their value over the last 12 months

The cuts at the company, which has operations in Britain, Ireland, Belgium, France, and Italy, as well as other markets, will likely fall most heavily in Britain, its largest market.  File photo

Takeaway delivery firm Deliveroo has said it would cut around 9% of its global office workforce, or around 300 roles, as it struggles to become profitable in a tougher consumer environment that has caused orders to slow.

The cuts at the company, which has operations in Britain, Ireland, Belgium, France, and Italy, as well as other markets, will likely fall most heavily in Britain, its largest market.    

"We are experiencing record high inflation, rising interest rates, an energy crisis and fears of a recession in the UK," said founder and chief executive Will Shu in an online company post. "We have to run our business in the most efficient way possible to withstand these challenges, and take a hard look at our cost base," he said. 

Deliveroo has grown rapidly since it was founded in London a decade ago, and its delivery riders are not affected by the announcement. Along with rivals Just Eat and Uber Eats, its growth accelerated during the pandemic when people stuck at home ordered more meals. 

Order numbers, however, slipped in its last quarter, even though their total value rose as restaurants increased prices.

Mr Shu said the economic situation was now tougher and the company needed to sharpen focus on profitability after breaking even in the second half of 2022. "We now face serious and unforeseen economic headwinds," he said in the blog. "Quite bluntly, our fixed cost base is too big for our business," he said. 

Economic headwinds and rising interest rates have hit technology companies, leading global firms to shed more than 150,000 workers as they rein in costs to ride out a global downturn. 

Deliveroo floated in March 2021 but the stock has struggled to retain its early valuation since. The shares have lost 40% of their value over the last 12 months. 

Irish Examiner and Reuters