Third-party delivery company Grubhub laid off about 500 employees Friday as part of an integration with its new owner, food hall-delivery concept Wonder.
In a message to employees, Grubhub CEO Howard Migdal said the cuts were necessary to eliminate management layers and remove redundant positions as the two companies join forces. The layoffs spanned all teams at Chicago-based Grubhub.
Wonder, which operates a chain of delivery-focused food halls on the East Coast, completed its acquisition of Grubhub in January for $650 million.
“As we integrate the two organizations, Grubhub is making necessary operational adjustments, including some difficult workforce reductions, to streamline our operations and drive future success,” a Wonder spokesman said in a statement. “We recognize the challenges these changes present and remain committed to supporting all affected employees during the transition.”
Wonder and Grubhub have some similarities. Both operate mobile apps and rely on fleets of delivery people to transport restaurant food.
But whereas the Grubhub app offers a marketplace of many different restaurants, from national chains to mom-and-pops, Wonder’s features the company’s 30 in-house brands as well as meal kits from Blue Apron. Wonder has said it plans to eventually add select Grubhub restaurants to its app as well.
"Our combination with Wonder gives us a powerful opportunity to join first party restaurants, third party food delivery, prepared meals and grocery all under one umbrella to revolutionize how people order food," a Grubhub spokesperson said in a statement, adding that the changes will allow Grubhub to tap into an "agile, startup mindset."
The mass layoffs are the second in two years for Grubhub, which let go of about 400 people in 2023.
The company has struggled to compete with delivery rivals DoorDash and Uber Eats and has fallen into a distant third in terms of food delivery market share in the U.S. Its sale price of $650 million represented just a fraction of the $7.3 billion it sold for in 2021, when it was acquired by European delivery giant Just Eat Takeaway.com.
The spokesperson said Grubhub recorded positive free cash flow in 2024 and has 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," the person said.
Wonder, meanwhile, has been growing rapidly and is on pace to have about 90 locations by the end of 2025. The company was founded by Marc Lore, the billionaire entrepreneur behind ecommerce companies Diapers.com and Jet.com. Lore is also an owner of the Minnesota Timberwolves and Minnesota Lynx pro basketball teams.
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