Grubhub , the prominent food delivery platform, recently underwent a significant reduction in its corporate workforce, with approximately 400 employees, equivalent to 15% of its staff, being laid off. The rationale behind this decision, as communicated by CEO Howard Migdal in a memo to employees, was the company’s pursuit of “competitiveness” in a challenging market landscape. Grubhub has encountered difficulties in gaining market share, with competitors like Uber Eats and DoorDash surging ahead, as indicated by research conducted by Bloomberg Second Measure.

In response to the layoffs, Grubhub has pledged to provide a minimum of 16 weeks severance to affected employees. However, the company has refrained from divulging specific details regarding the groups or positions that have been impacted by this restructuring. CEO Howard Migdal acknowledged the necessity of making tough decisions to ensure the company’s long-term success while upholding its commitment to delivering exceptional service to diners and other partners. Migdal emphasized the existence of a strong foundation and a vast potential that lies ahead for Grubhub.

Grubhub, once a publicly traded company, was acquired by the Dutch multinational corporation Just Eat Takeaway.com in 2021. This acquisition, an all-stock transaction, valued Grubhub at a substantial $7.3 billion. However, less than a year after the completion of the deal, Just Eat Takeaway expressed its consideration of a “partial or full sale” of Grubhub. When approached for comment on whether the recent layoffs were connected to this potential sale process, a spokesperson for Grubhub declined to provide an immediate response to CNBC’s inquiry.

These developments signify the challenges faced by Grubhub in an increasingly competitive food delivery market. While the company strives to adapt and maintain its competitiveness, it remains to be seen how the ongoing restructuring will impact its trajectory and future prospects.