Uber laid off 185 Postmates workers last week, a move that comes six months after the two sides decided to merge for $2.65 billion.
The number of employees makes up about 15 percent of Postmates’ workforce, according to The New York Times. Much of the leadership team, including CEO and founder Bastian Lehmann, are leaving. However, Lehmann’s exit is separate from the layoffs.
“We are so grateful for the contributions of every Postmates team member,” Uber spokesman Matt Kallman told the newspaper. “While we are thrilled to officially welcome many of them to Uber, we are sorry to say goodbye to others. We are so excited to continue to build on top of the incredible work this remarkable team has already accomplished.”
Uber’s purchase of Postmates made it the second-largest third-party delivery company behind DoorDash. According to Second Measure, DoorDash occupied 52 percent of the delivery market in December, followed by 22 percent for Uber Eats, 18 percent for Grubhub, and 7 percent for Postmates.
In the push to become profitable and expand market share, the company decided to merge with Postmates after talks with Grubhub fell through. Grubhub later combined with European brand Just Eat Takeaway for $7.3 billion.
The Times reported that Postmates and Uber will remain separate as brands, but most of the behind-the-scenes work will be operated by Uber employees. Pierre Dimitri Gore-Coty, global head of Uber Eats, is leading the merged business. Sources told the outlet that some Postmates executives will receive multimillion dollar packages and that other employees may see reduced packages. Meanwhile, other workers will be asked to leave or serve out their contracts.
In May, Uber laid off roughly 3,700 employees, which represented about 14 percent of the company.
Uber has not earned a profit in its decade-long history. The company lost $1.09 billion in Q3, but revenue from the food delivery business skyrocketed 125 percent to $1.45 billion. Additionally, delivery gross bookings rose 135 percent from $3.7 billion last year to $8.6 billion in 2020. Uber’s Rides business declined 52 percent to $1.37 billion in the quarter as the COVID pandemic continues to limit travel.