Deliveroo has announced that they will be cutting approximately 9% of its workforce, equating to around 350 jobs, primarily affecting employees in the UK.

The job cuts have been put down to over-hiring due to increased demand during the pandemic, which has now subsided. Additionally, the company's exit from certain markets has resulted in a need for a smaller workforce.

Around 50 employees may be redeployed, reducing the actual number of jobs lost to approximately 300. The cuts do not include any self-employed riders who deliver for the company.

Deliveroo's market value has declined by more than 40% in the last year.

In spite of a 2% fall in group order numbers in Q4 2021, Deliveroo announced in January that it had improved profitability through cost-cutting measures. In the UK and Ireland, order numbers remained steady at 40.6 million, of a total of 75.1 million in the final quarter.

Deliveroo currently operates in ten markets, including France, Hong Kong, and Italy, and works with about 176,000 restaurants and grocery partners, using roughly 150,000 riders to deliver food. The company exited Australia and the Netherlands last year.

Deliveroo CEO, Will Shu commented:

“The world we operate in has changed. We now face serious and unforeseen economic headwinds.

We have also recently exited markets, meaning we do not require the same size workforce to support our operations. Quite bluntly, our fixed cost base is too big for our business."

Moreover, the Deliveroo CEO has expressed concerns over the current state of the UK economy, including rising inflation, interest rates, and energy costs, as well as the possibility of a recession. These factors have led to a need to reshape the business and prioritize profitability.

Deliveroo joins other tech-focused businesses, including Meta (Facebook-owner), Google, Microsoft, Snapchat, and Twitter, in announcing cuts.