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Grubhub is cutting 500 jobs nearly two months after the Chicago-based food delivery company was bought by New York startup Wonder for a fraction of its 2021 valuation.
Employees were notified about the layoffs in an email sent Friday at 7 a.m. from CEO Howard Migdal.
“Since we closed the transaction with Wonder, we have been aligning how our businesses work together,” Migdal said. “In order to achieve our ambition, we must prioritize the right work and execute with speed and conviction by reducing management layers, bringing leaders close to the business and removing duplication.”
The layoffs affect all Grubhub teams as it integrates with Wonder, which completed its acquisition in early January. Laid-off employees will receive severance and outplacement services, said Migdal, who will continue as CEO.
Migdal said Grubhub leaders would hold team meetings on Friday with remaining employees. In March, the company will hold a town hall “where we’ll talk more about the path forward and our strategy for 2025.”
Wonder, a food delivery startup, purchased Grubhub for $650 million, including $500 million in senior notes and the rest in cash. The value was a far cry from the $7.3 billion Just Eat Takeaway paid for Grubhub in 2021.
The Grubhub brand will remain and continue to operate as part of Wonder, a Grubhub spokesperson said. The layoffs only affect its corporate employees and do not include Grubhub’s delivery partners.
On Thursday afternoon, Grubhub employees received an email from Jeremy Siefken, head of human resources, according to information obtained by Sun-Times. He told staff to work from home the next day because offices would be closed and inaccessible as the company prepared to share news about “a restructure that will impact the number of roles we’ll have at Grubhub.”
Siefken said, “We know this is tough news to hear and will likely cause some uneasiness for the rest of today. Our intention is to be transparent and inform everybody of these actions in advance to help you prepare.”
Grubhub will reduce its Chicago staff to about 600, according to a company spokesperson. As of November 2024, it had 750 employees in Chicago and 2,200 nationwide. It moved its headquarters in December 2024 from the Burnham Center, 111 W. Washington St., to the Merchandise Mart .
The company has gone through several rounds of job cuts, including a 2023 layoff of 15% of its corporate staff. In 2021, Grubhub had 1,200 employees in Chicago.
In recent years, Grubhub’s business has been hammered by competition from the likes of Uber Eats and DoorDash, and by restaurants taking over deliveries themselves to avoid sharing fees. The end of the pandemic also lowered demand for food deliveries.
Wonder, founded by former Walmart executive Marc Lore, touts itself as a “new kind of food hall” that allows customers to get dishes from top restaurants and celebrity chefs in a single order, delivered in about 30 minutes.
A Grubhub spokesperson on Friday said Wonder combines “first party restaurants, third party food delivery, prepared meals and grocery all under one umbrella.”
The spokesperson added, “18 months ago, we launched a plan to accelerate growth and return to positive free cash flow. We’re proud that we achieved positive free cash flow in 2024 and that we have returned to growth. We have good momentum, and today’s reorganization will allow us to continue maximizing our potential by increasing investments to fuel growth.”
Grubhub’s previous owner, Just Eat Takeaway had tried to sell the food delivery company since 2022. The Amsterdam-based company had cited higher food prices and competition as reasons for a decline in U.S. orders.
