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A food delivery person in Yaletown in Vancouver, on Dec. 3, 2020.JONATHAN HAYWARD/The Canadian Press

Global food-delivery conglomerate Just Eat Takeaway.com NV JTKWY is laying off as many as 350 Canadian employees as it becomes the latest company to slash costs in a skittish market for the sector.

The conglomerate bought Winnipeg-based SkipTheDishes in 2016 when it was one of Canada’s highest-profile startups. A LinkedIn analysis shows SkipTheDishes employs nearly 3,000 people across Canada, the largest group of which are in Winnipeg, where most of the layoffs are believed to have taken place.

Though food delivery has boomed in recent years, especially during the pandemic, the sector faced a wave of consolidation in recent years as it struggled to manage its costs in the face of rapid growth. Like numerous courier-focused companies, it has also clashed with employees and unions over labour rights and costs.

The delivery sector is also grappling with a reopening world after more than two years of staggered pandemic shutdowns. And since mid-November, markets have been punishing cash-hungry tech companies after years of growth-at-all-costs exuberance. Just Eat Takeaway’s Amsterdam-listed shares have fallen more than 70 per cent since then.

Just Eat Takeaway says it has 94 million active customers in 22 countries, and owns numerous other food-delivery brands including Grubhub, Foodora and Lieferando. In August, the Dutch conglomerate revealed that its loss for the first half of 2022 had grown more than sevenfold, to €3.5-billion ($4.6-billion) from €486-million a year earlier.

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Just Eat Takeaway says it has 94 million active customers in 22 countriesJONATHAN HAYWARD/The Canadian Press

Jitse Groen, the company’s chief executive, tried to assuage investors in a news release Aug. 3 by saying that “our path to profitability is accelerating.” He said he hoped the company’s earnings before interest, taxation, depreciation and amortization would be positive on an adjusted level by sometime next year.

Just Eat Takeaway confirmed the Canadian layoffs after CTV News Winnipeg and the tech-news website BetaKit first reported them. “Following a comprehensive review of its Global Logistics workforce, Just Eat Takeaway.com has made changes to the global organization to best set the business and its partners up for sustainable growth,” an unnamed Just Eat Takeaway spokesperson said by e-mail Monday.

“This includes reducing the size of the Logistics team in Canada that support multiple, global markets across the business.”

Early backers of SkipTheDishes included Shopify Inc. executives Tobi Lutke and Harley Finkelstein, Wattpad Corp. co-founder Allen Lau, Two Small Fish Ventures co-founder Eva Lau, and David’s Tea co-founder David Segal. Its 2016 acquisition was worth as much as $200-million.

In late August, Just Eat Takeaway sold its one-third stake in the Brazilian food-delivery platform iFood to the Dutch multinational Prosus NV for as much as €1.8-billion including performance payments. In announcing the sale, Just Eat Takeaway said it “remains focused on improving its profitability and on a disciplined allocation of capital.”

After Canadian tech heavyweights such as Shopify Inc., Wealthsimple Inc., Hootsuite Inc. and CFT Clear Finance Technology Corp. (Clearco) each announced rounds of cost-cutting layoffs this summer, the sector’s cuts do not appear to be slowing. CubicFarm Systems Corp., an indoor farm technologies startup, said Monday it would cut its work force by half, laying off 87 people to help save about $15.6-million a year. Langley, B.C.-based CubicFarm also saw an executive shakeup just weeks ago.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 24/05/24 3:48pm EDT.

SymbolName% changeLast
JTKWY
Just Eat Takeaway.com N.V. ADR
-2.21%2.66

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