Yahoo Finance Just Eat to lay off 1,700 delivery staff as takeaway boom ends
Just Eat Takeaway is to lay off as many as 1,700 delivery drivers as the takeaway company grapples with a post-pandemic slowdown.
Bosses are understood to have informed impacted workers on Tuesday morning, with delivery drivers being offered six weeks’ notice with pay. The shake-up will also affect 170 full time Just Eat staff within its operations team.
The £3.5bn food delivery company, which is listed in London and Amsterdam, has been seeking to slash spending as takeaway order numbers plunge post-pandemic and families grapple with the cost-of-living crisis.
Total customer numbers fell by 9pc in 2022, the company said at its annual results earlier this month, while rising inflation means diners are spending about 3pc more on an average order.
Shares in Just Eat have fallen by around 15pc this year, and it is trading down around 85pc compared to their peak during the pandemic. The company’s pre-tax losses widened to €5.7bn (£5bn) from €1bn last year, driven by one-off costs related to its purchase of rival Grubhub and the merger of Just Eat and Takeaway.com.
Just Eat, which has attempted to single itself out from “gig economy” rivals such as Deliveroo by offering predictable wages and sick pay to riders, said it would halt the employment model in six cities in Britain under the shake-up.
A Just Eat spokesman said: “Just Eat UK is reorganising and simplifying its delivery operation as part of the ongoing goal of improving efficiency. As part of this process we have proposed to transition away from the worker model for couriers, which is a small part of our overall delivery operations - running in certain parts of six UK cities. There will be no impact to the service provided to partners and customers.
“Our top priority now is to support impacted employees and couriers. We are hugely grateful to our talented colleagues and couriers who have been part of the worker model in the UK.”
The company is said to be replacing agency workers with freelance drivers which can access its on-demand app similar to Deliveroo. It is understood that agency workers only accounted for a small percentage of total UK delivery drivers.
Just Eat will still hire workers on hourly wages in other markets. Several European countries have pushed through law changes to give delivery couriers enhanced employment rights.
But executives at Just Eat are understood to believe hiring workers - which comes with additional costs such as holiday pay - in the UK meant it was facing steeper costs to deliver takeaways than its main rivals.
Efforts by unions to boost the rights of food delivery couriers in the UK have so far failed, with judges so-far upholding their status as freelancers. Just Eat’s main UK rival, Deliveroo, treats its riders as self-employed.
