SAN FRANCISCO – Uber laid off around 185 Postmates staff, or around 15 percent of the total Postmates workforce, Thursday, three people aware of the measures said as the hailfighter consolidates its grocery delivery activities to weather the pandemic.
Most of Postmates’ leadership team, including Bastian Lehmann, the founder and CEO of the popular grocery delivery app, will be leaving the company, said the people who spoke on the condition that they would not be named because they did not have authority were to speak publicly. Uber bought Postmates for $ 2.65 billion last year.
Some Postmates vice presidents and other executives will be leaving with multi-million dollar exit packages, people said. Some employees might also see reduced compensation packages, people said, while others are being asked to leave or serve the end of their contract positions, which could lead to more exits in the coming months.
The cuts are part of a larger integration of Uber’s grocery delivery division, Uber Eats, with Postmates. While the brand and app remain separate from Postmates, much of the infrastructure behind the scenes is merged with Uber Eats and supported by Uber Eats employees. Pierre Dimitri Gore-Coty, the global head of Uber Eats, will continue the combined grocery delivery business.
An Uber spokesman, Matt Kallman, confirmed the cuts. “We are very grateful for the contributions of all the Postmates team members,” said Kallman. “While we’re excited to officially welcome many of you to Uber, we regret to say goodbye to others. We look forward to continuing to build on the incredible work this remarkable team has already done. “
Food delivery has been vital for Uber as the hailship business has been severely weakened by the impact of the pandemic on travel. Dara Khosrowshahi, Uber’s managing director, has described the delivery of food as a bright spot. Last year, Uber Eats’ revenue surpassed its ride-hail business for the first time when people ordered more meals to be delivered to their homes.
Uber, who is losing money, laid off hundreds of employees in 2019 to bring costs under control. The company currently has more than 21,000 full-time employees. The drivers are independent contractors.
While Uber was strong at grocery delivery, it had to fend off deep pocketed competitors who wanted to gain market share by subsidizing delivery costs with specials and discounts.
DoorDash, which went public in December, has grown rapidly in recent years and has taken over the smaller grocery delivery start-up Caviar. Other major competitors include Just Eat Takeaway, which Uber beat Uber to acquire Grubhub for more than $ 7 billion last year, and Deliveroo, a delivery company popular in Europe.