Just Eat Takeaway is cutting 390 jobs from its workforce in France, constituting part of a broader global restructuring effort as the food delivery giant looks to reverse its recent downturn.
Just Eat Takeaway is the result of a $7.6 billion merger between the U.K.'s Just East and Dutch rival Takeaway.com back in 2020. Shortly after, the new combined entity revealed plans to acquire Grubhub in the U.S., a $7.3 billion all-stock transaction that took the better part of a year to close. This food-delivery consolidation push was driven in large part by the global lockdown, a period through which many investment dollars were thrust toward helping people live better in a socially isolated world.
But as things have returned (somewhat) to normal, many businesses that boomed due to the pandemic are facing something of a correction, with once-hefty valuations crumbling over the past year amid the global economic meltdown. This isn't limited to one specific industry, with everything from virtual events companies to at-home fitness firms impacted, and it's clear that the on-demand delivery sphere has been hit hard too. The $12 billion-valued instant delivery startup Getir, for example, recently revealed it was cutting 14% of its workforce in the wake of a steep expansion drive, while there was a similar story for German company Gorillas which also announced a round of layoffs. And in the U.S., Gopuff last week confirmed its second round of layoffs in the past four months.
It's against that backdrop that Just Eat Takeaway is now looking to trim back as it shoots for "sustainable profitable growth."
Did somebody say layoffs?
While Just Eat Takeaway is the preeminent food delivery platform in many European markets, in France it seemingly lags behind Uber Eats and Deliveroo by a considerable margin, with the former reportedly claiming close to 90% market share between them. So cutting back in places where it was already facing an uphill challenge is an obvious measure to take, with Reuters yesterday reporting that 350 couriers and 40 office staff are affected by the layoffs.
A spokesperson for Just Eat Takeaway issued this statement to TechCrunch:
Due to the challenging market dynamics in France and our ambition for sustainable profitable growth, we have the intention to restructure our operations in France. The strategic restructuring will consist of redundancies of staff in the Paris office and changes in the operations of our delivery business.
Less than a year after expanding into the U.S. via its Grubhub acquisition, Just Eat Takeaway revealed that it was considering a partial or full sale of Grubhub. This was in response to a plummeting valuation, with its market cap falling by more than half between when it closed the Grubhub deal in June, 2021, and its Q1 2022 earnings in April. Its valuation has continued in freefall, now sitting at a little more than €3 billion -- a staggering 84% down on its €20 billion peak just 10 months ago.
There is a similar story in other industries too, with Klarna last month revealing its private valuation had dropped by 85% in the space of year, much like its publicly traded rival Affirm which has fallen by roughly the same figure.
On top of that, Just Eat Takeaway chairman Adriaan Nühn left the company back in May, while COO Jörg Gerbig also left the management board after being investigated for "possible personal misconduct".
But amidst all this turmoil, there are some positive signs. Earlier this month, Just Eat Takeaway signed a major deal with Amazon, which revealed it was taking an equity stake in Grubhub and would be promoting the food delivery service as part of its Prime membership program.
Reading between the lines, there could be scope for Amazon to advance its interest in Grubhub further down the road, but the tie-up remains more of a partnership for the time being.
But it's a different story in France, where Just Eat Takeaway is very much in retreat for now.