Skip the Dishes, parent company laying off hundreds of employees in Canada

About 800 Canadian employees are being laid off by Skip the Dishes and its parent company.

The workforce reduction will affectapproximately 100 Canada-based workers withSkip the Dishes, the food delivery service's chief executive, Paul Burns, said in a post on LinkedIn on Tuesday.

Meanwhile, some 700 operations employees based out of Canada who work for its owner, Just Eat Takeaway.com, will also lose their jobs, he said.

"Decisions that impact people's jobs are never simple or easy, however the measures we took are necessary to ensure we have the right resources and organizational structure in place to drive sustainable growth," he said in the post.

"A more focused approach will also ensure we continue to provide an enhanced offering to customers and exceptional service to all our stakeholders."

The cuts come roughly a year after Skip the Dishes' top job was handed to Burns, who ran Twitter Canada before the company was bought by eccentric billionaire Elon Musk, who laid off a significant portion of the workforce.

The business Burns took over had spent the years prior navigating a new ownership structure along with a health crisis.

Skip the Dishes, which was long headquartered in Winnipeg and has been around since 2012, was acquired in December 2016 for $110 million by Just Eat, which merged with Takeaway.com in 2020, while the COVID-19 pandemic was raging.

Measures meant to quell the virus temporarily shut down many businesses and pushed people to spend increasing periods of time at home. The lack of venturing out was seen as a boon for food delivery services, which people increasingly turned to as a comfort and convenience during the crisis.

As pandemic measures lifted, however, inflation and then interest rates soared, weighing on consumers and forcing many to look for ways to reduce spending.

Skip the Dishes laid off about 350 workers based in Winnipeg, most of whom worked in remote contact centre roles, in 2022.

The company said the decision spawned from a "comprehensive review of its global logistics workforce" that was designed to uncover changes that "best set the business and its partners up for sustainable growth."

Possible iceberg's tip: professor

Thomas Sasso, an assistant professor at the University of Guelph School of Business and Economics, says Tuesday's layoffs are "extremely concerning" and an indication of some "greater difficulties" for the organization's businessmodel.

Skip the Dishes didn't clarify if gig workers are among those laid off, butSasso said salaried employees are more likely to have been among those let go a concern that replicates in the business world.

"The reliance on gig workers can make it seem more beneficial to lay off or to not create full-time paid positions," he said.

Sasso said there are also "substantial concerns" about other similar organizations following suit, either because they see Tuesday's announcement as a viable opportunity to engage in layoffs or because their business models aren't sustainable enough anymore after theirinitial, rapid growth.

"This could be the tip of an iceberg," he said.