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Postmates Lays Off ‘Dozens’ of Employees, Shutters Mexico City Office

by Jennifer Marston
December 4, 2019December 4, 2019Filed under:
  • Business of Food
  • Delivery & Commerce
  • Featured
  • Restaurant Tech
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Food-delivery company Postmates — generally seen as one of the big four alongside DoorDash, Grubhub, and Uber Eats — has laid off dozens of employees and closed down its Mexico City office, according to an article published on CNBC.

Postmates has not said exactly how many layoffs it is doing, noting only in a statement to CNBC that “the number was at least several dozen and included people in the San Francisco headquarters as well as in Los Angeles, Nashville, Tennessee, and other offices.” The layoffs started this week, according to one CNBC source. According to another source from the same article, the company is in talks to find a potential buyer.

The news paints a drastically different version of Postmates from the one we were staring at just a few months ago, when the San Francisco-based service raised another $225 million, bumping its valuation up to $2.4 billion. The company also filed paperwork for an IPO earlier in 2019.

Since then, however, the market for both IPOs and food delivery services has taken a left turn to some darker place than anticipated at this time last year.

On the IPO front, disappointing debuts from Uber and Lyft, not to mention the ongoing WeWork meltdown, have altered investor sentiment. In other words, investors aren’t necessarily rushing to back companies with questionable profitability models.

Food delivery services in particular are getting more and more questions around not just their profitability (which doesn’t exist) but also their sustainability over the long term. Getting a latté delivered to your door might be convenient, but the process is increasingly fraught with tensions over how these companies handle commission fees for restaurants and treat their workers. Suffice to say, those tensions have called into question the current model for restaurant food delivery.

Postmates hasn’t been center stage for much of these debates. Instead, the service has kept busy in 2019 doing high-profile partnerships with Major League Baseball teams and national restaurant chains. In fact, just this morning, Postmates announced a major deal to start delivering TGI Friday’s in the U.S.

Nonetheless, the company is feeling the effects of the War on Food Delivery, as this week’s news makes clear. “We made the difficult decision to end operations in Mexico City as we focus on our continued growth in the U.S.,” Postmates said in a statement to CNBC. “We continually review our business to ensure that staffing is aligned with current business needs and have made small adjustments as a result.”


Related

Uber Lays Off More Than 180 Employees of Postmates

Uber has laid off about 15 percent, or roughly 185 people, from its Postmates division, according to a report this weekend from the New York Times. The layoffs come just a couple months after Uber completed the $2.65 billion acquisition of the rival delivery service. The NYT noted that the…

Uber Just Made an Offer to Buy Postmates

Just weeks after it lost the chance to acquire Grubhub, Uber has made an offer to buy Postmates, according to the New York Times.  Three sources “familiar with the matter” and speaking anonymously told the NYT that Uber could potentially buy its third-party delivery rival Postmates for $2.6 billion and…

Reports of a Grubhub Sale Fuel Talk of Consolidation for Third-party Food Delivery

Grubhub has hired financial advisors and is “considering strategic options including a possible sale” according to a report published by the Wall Street Journal yesterday.  The news comes on the heels of a rough few months for Grubhub that started when the third party delivery service reported lackluster Q3 results…

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Tagged:
  • DoorDash
  • food delivery
  • GrubHub
  • Postmates
  • Uber Eats

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