Just Eat to lay off 1,700 drivers as slowdown bites
Just Eat Takeaway is to lay off as many as 1,700 delivery drivers as the food delivery business wrestles with a slowdown in demand.
Staff were informed of the decision earlier today, according to reports in the Telegraph, with as many as 170 operations staff also impacted by the decision.
Those being laid off are understood to be given six weeks’ notice with pay. The move will involve a shift to using more self-employed ‘gig’ workers as part of a bid to cut costs.
A Just Eat spokesman said: “Just Eat UK is reorganising and simplifying its delivery operation as part of the ongoing goal of improving efficiency. As part of this process we have proposed to transition away from the worker model for couriers, which is a small part of our overall delivery operations - running in certain parts of six UK cities. There will be no impact to the service provided to partners and customers.
“Our top priority now is to support impacted employees and couriers. We are hugely grateful to our talented colleagues and couriers who have been part of the worker model in the UK.”
Last month, Just Eat said its UK orders had dropped 10% and the firm alarmed investors by failing to offer a sales forecast for 2023.
Global orders fell 9% in 2022, Just Eat said, while revenues increased 4% to 5.6 billion euros (£4.9 billion). CEO Jitse Groen said most of the increased sales related to higher prices charged by restaurants.
Gross transaction value (GTV), a measure of the size of orders, stayed flat. But despite Just Eat’s competitor Delivery Hero giving transaction value forecasts for 2023, Just Eat gave no sign of where it expected sales to be by the end of the year.
Giles Thorne, analyst at Jefferies, said: “The most interesting element is what wasn’t said.”
Losses came in at $5.7 billion euros, in large part as a result of an impairment on the value of its acquisitions and a book loss on the sale of its stake in delivery subsidiary iFood.
Groen said: “Our ambition to create a highly profitable food delivery business is firmly on track.”
Just Eat shares climbed 3.5% to 1596p on the back of the layoffs news. The stock is down 40% over the past year.