Grubhub, the US-based food delivery company, has announced plans to lay off approximately 500 employees, representing more than 20% of its workforce, according to an official letter by Grubhub CEO Howard Migdal.

The decision comes as the company integrates its operations with Wonder, the food delivery startup that acquired Grubhub last month. CEO Migal says the move aims to streamline the business and eliminate duplication following the takeover.  

In an email sent to employees on Friday, Migdal explained that the job cuts are part of efforts to "prioritise the right work and execute with speed and conviction". He stated that the layoffs span all teams and are necessary to align Grubhub's operations with Wonder's vision of becoming "the primary destination for mealtime". Migdal described the decision as "difficult" but essential for the company's future growth.  

Grubhub, which had over 2,200 full-time employees as of 2024, was previously owned by Just Eat Takeaway, Europe's largest meal delivery firm. According to a report by Reuters, Just Eat sold Grubhub for $650 million in 2023 after struggling with slowing growth and high taxes, a significant loss compared to the billions it paid to acquire the company in 2020.  

Since the acquisition by Wonder, led by former Walmart executive Marc Lore, Grubhub has been exploring ways to innovate and reduce costs. Last month, the company partnered with autonomous technology startup Avride to deploy delivery robots on US college campuses, aiming to address labour shortages and reduce reliance on cars, states the Reuters report.  

In his email, Migdal assured affected employees that they would receive severance packages and outplacement services to support their transition. He also announced plans for a town hall meeting in March to discuss the company's strategy for 2025 and the path forward.  

The layoffs highlight the challenges facing the competitive food delivery industry, where companies are under pressure to cut costs and improve efficiency. Migdal, in his message, expressed confidence in Grubhub's future, stating that the partnership with Wonder positions the company to "disrupt the restaurant industry and redefine how people think about food delivery".