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Shares of DoorDash (NYSE:DASH) are trading over 3% higher in pre-market after the company’s CEO Tony Xu told staff about plans to cut 1,250 jobs, according to Bloomberg News.
This way, DoorDash will be cutting around 6% of the total workforce, both in the U.S. and globally, the report added. The aim is to lower operating expenses, which topped $2 billion in the third quarter.
“While our business continues to grow fast, given how quickly we hired, our operating expenses – if left unabated – would continue to outgrow our revenue,” Xu wrote in a letter to staff on Wednesday, Bloomberg reported.
Xu added that DoorDash “will continue to reduce our non-headcount operating expenses, but that alone wouldn’t close the gap. This hard reality ultimately led me to make this painful decision to reduce our team size.”
Last year, DoorDash agreed to acquire the European delivery service Wolt for $8B to accelerate its international expansion.
“We must keep this level of discipline moving forward and act with the hunger, efficiency and creativity of the younger startup we once were while leading with the responsibility of the market leader we’ve become,” Xu added in a memo to staff.
Based on yesterday’s closing price, DASH shares are down nearly 65% year-to-date.
