Gig Economy

Deliveroo To Lay Off 15 Pct Of Staff Amid COVID-19

Deliveroo To Lay Off 15 Pct. Of Staff Amid COVID-19

Deliveroo announced it was laying off 367 employees and furloughing 50 — roughly 15 percent of its staff of over 2,500 — as it battles falling demand and revenue during the coronavirus pandemic, according to several reports on Tuesday (April 28).

The layoffs are taking place in several countries across Europe. A Deliveroo spokesman told TechCrunch that the cuts are due to the coronavirus crisis as the company struggles to reduce long-term expenses.

“The extraordinary global health crisis we are living through has impacted nearly all businesses. As a result, like so many others, Deliveroo has had to examine how to overcome the challenges we all face, as well as ensure we are in the strongest position possible following the crisis,” the spokesman said in a statement.

The decision to lay off employees comes days after the Competition and Markets Authority (CMA) provisionally approved Amazon’s investment in Deliveroo. Earlier this month, Deliveroo issued a plea to the CMA to approve the investment or it would “fail financially” due to the pandemic.

“Deliveroo has huge dependencies on some mega cities; if a market like London shuts down, with zero footfall for an extended period, it doesn’t matter if the volume of delivery has gone up, it can’t sustain it,” Johan Svanström, partner at EQT Ventures, told Sifted.

The U.K. startup was launched in 2013 and operates in 13 markets globally, with the biggest presence in Europe, the Middle East and Asia. 

Delivery riders across the U.K. told CNBC that the pandemic has decimated the demand for takeout. Workers said they are barely making minimum wage and that the money coming in is a far cry from what they made before the virus forced mandatory lockdowns.

“Food delivery couriers working for Deliveroo, Uber Eats, Just Eat and Stuart, who were already facing poverty wages before the pandemic, are now being driven to destitution, as demand has completely dried up across the U.K.,” IWGB Couriers and Logistics Branch Chair Alex Marshall told the news outlet.

The ongoing coronavirus pandemic is causing more companies to lay off employees, with Uber announcing it could reduce its workforce by 20 percent. The coronavirus crisis has been harsh for gig economy workers. In addition to many of them being pushed to the frontlines for food deliveries, unemployment benefits have proved to be tricky — a problem that will be made worse as layoffs increase.

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