In a significant restructuring move, food delivery giant GrubHub has announced the layoff of 500 employees, representing 20% of its workforce. This decision comes less than two months after the company was acquired by its competitor, Wonder, a food app delivery service.
Howard Migdal, GrubHub’s CEO, communicated the news to the company’s employees early Friday morning. He stated that the layoffs were a necessary step as the company begins to merge operations with Wonder. The layoffs will affect all teams within the company.
On February 28, GrubHub employees were instructed to work remotely in anticipation of the restructuring announcement. The company made it clear that the changes would significantly impact the number of roles within GrubHub.
Migdal acknowledged the difficulty of the situation, stating, “We understand this news may cause unease. Our goal is to be transparent and provide advance notice of these changes to help our employees prepare.”
In November, Wonder announced its acquisition of GrubHub from Just Eat Takeaway.com for $650 million. The deal, which was finalized on January 7, represented a significant loss for the Amsterdam-based company, which had purchased GrubHub for $7.3 billion.
Wonder, founded by tech entrepreneur Marc Lore, is known for its successful startups, including Diapers.com and Jet.com, which were acquired by Amazon and Walmart, respectively. The company positions itself as a unique food hall that delivers custom meals from renowned chefs and restaurants.
A GrubHub spokesperson stated, “Eighteen months ago, we initiated a plan to accelerate growth and return to positive free cash flow. We’re proud to have achieved positive free cash flow in 2024 and to have returned to growth. Today’s reorganization will enable us to continue maximizing our potential by increasing investments to fuel growth.”