Main image of article DoorDash Blames New Layoffs on Pandemic Hyper-Growth

DoorDash plans on laying off 1,250 workers.

In a note to employees, CEO Tony Xu blamed the cuts on overexuberant spending during the past few years. “The pandemic presented sudden and unprecedented opportunities to serve the evolving needs of merchants, consumers and Dashers,” he wrote. “We sped up our hiring to catch up with our growth and started many new businesses in response to feedback from our audiences.”

That spiked the company’s operating expenses: “While our business continues to grow fast, given how quickly we hired, our operating expenses—if left unabated—would continue to outgrow our revenue.” 

Impacted employees will receive 17 weeks of compensation and their February 2023 stock vest; health benefits will continue through the end of March. “Looking ahead, we’re confident that we have reset the size and shape of our organization to match our strategic priorities,” Xu concluded. “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.”

DoorDash isn’t alone in laying off valuable workers. Cisco recently proposed plans to cut 5 percent of its workforce; Amazon, Twitter, Meta, Lyft, Stripe, and other giants have all announced hiring freezes or staff reductions. Many of these companies spent heavily on hiring during the pandemic, buoyed in many cases by record revenues from cloud-based apps and services. But fears of a potential recession have curtailed customer and business spending, leading executives to consider headcount reductions.  

Despite these layoffs, however, the current tech unemployment rate stands at 2.2 percent, with companies continuing to hire—presenting opportunities for technology professionals with the right skills. According to, which crowdsources compensation data for tech companies, DoorDash pays its engineers a competitive rate to similar companies such as Uber and Instacart—and if it truly wants to remain a market leader, it’ll need to spend on talent.