Grubhub plans to lay off roughly 500 workers as it begins to integrate with new owner Wonder, the company announced Friday.
CEO Howard Migdal said the cuts “span all teams.” The layoffs represent about 23 percent of Grubhub’s workforce.
The executive explained that Wonder and Grubhub have been determining how their teams can best work together. Within these discussions, the two sides decided it needed to reduce management layers, bring leaders closer to the business, and remove duplication to prioritize the right work and improve speed.
“These changes will position Grubhub to maximize our potential, create opportunities for leaders at Wonder and Grubhub to take on expanded roles and responsibilities in support of our shared vision, and enable us to focus our resources on our most important business objectives,” Migdal said in an open letter to employees.
The news comes about three and a half months after Just Eat announced it would sell Grubhub for $650 million, which is about $6.52 billion less than what it bought the company for in 2020—a 90 percent loss, in other words. Wonder acquired the third-party delivery company for $150 million in cash and the assumption of $500 million in debt. Grubhub’s business struggled leading up to the acquisition. In North America, where Grubhub is based, Just Eat completed 66.8 million orders in Q3, down 11 percent year-over-year. Year to date, orders were down 9 percent.
Founded by Marc Lore, Wonder is a food hall that offers multi-restaurant ordering, meaning guests can order from upward of 30 restaurant concepts in one order. Each item is made to order in a sequenced fashion so they finish simultaneously and can be delivered to guests at one time.
The transaction closed in January.
“Looking ahead, I am confident that, together with Wonder, we are in a strong position to disrupt the restaurant industry and redefine how people think about food delivery,” Migdal said. “While today is a difficult day, I have no doubt in our future and what we will accomplish together.”
Grubhub also laid off roughly 400 employees in June 2023 because of rising costs. This came a few months after Migdal was hired as CEO.
The delivery firm is one of several companies in the restaurant industry to announce staff cuts. Starbucks cut 1,100 employees and hundreds of unfilled positions. Outback Steakhouse owner Bloomin’ Brands laid off 100 workers and Topgolf eliminated an undisclosed number of roles.
