An on-demand delivery provider is laying off a sizable percentage of its workforce.

Grubhub is reducing headcount by about 15%, or roughly 400 jobs, as of June 12, 2023. In an open letter to employees posted on the company’s website, Grubhub CEO Howard Migdal, who joined the company a few months ago, said business has grown past levels recorded in 2019 before the COVID-19 pandemic, but operating and staff costs have increased at a higher rate.

Employees affected by the headcount reduction will be notified during the workday June 12. Grubhub has not specifically outlined how it will support laid off personnel or in what areas of the business jobs will be cut, but in his letter Migdal said the company’s focus will be on “prioritizing people’s wellbeing and supporting them in their next steps and future success.”

“Rightsizing the business for where we are now – which includes ensuring we have the right resources and organizational structure focused on the right priorities – will allow us to be more agile, make bolder bets and take advantage of all of the opportunities on our doorstep,” Migdal said, adding the company will soon discuss future plans in more detail with its remaining employees.

Netherlands-based global online food delivery marketplace Just Eat Takeaway purchased Grubhub in 2020. JustEatTakeaway.com has publicly said it is continuing to actively explore a partial or full sale of Grubhub, and these new job cuts could potentially make it a more attractive acquisition target.

Grubhub stays busy in wake of Amazon investment

In July 2022, Amazon reached an agreement with Just Eat Takeaway to acquire a 2% stake in the online delivery service. Since then, Grubhub and Amazon have added another year to a free 12-month offer that lets U.S. members of the Prime paid loyalty program sign up for a free one-year membership in the Grubhub+ premium plan, which includes unlimited $0 delivery fees for orders over $12.

Grubhub also recently began collaborating with the Homewood Suites by Hilton extended-stay hotel brand to provide deliveries from third-party food service retailers via its app at nearly 500 Homewood Suites locations across the country. The company has also entered a fulfillment partnership with fellow online delivery platform Gopuff and rolled out delivery robots at colleges nationwide, among other innovative initiatives.

However, May 2023 analysis from Bloomberg Second Measure indicates that Grubhub holds a 9% share of the U.S. meal delivery market, compared to 65% for DoorDash and 23% for Uber Eats.

Read the full report here.