Spain’s on-demand delivery startup Glovo announces downsizing, lays off 250 employees

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Barcelona-based Glovo, an on-demand delivery startup, announced downsizing as rising interest rates and inflation lowers the purchasing power of consumers.

In a message to employees posted on the company’s blog, Glovo CEO and co-founder, Óscar Pierre, says, “Today, I have difficult news to share. We are reducing the size of our team by 6.5 per cent and have to say goodbye to approximately 250 of our talented colleagues.”

“I and the management team deeply regret that this is necessary and take full responsibility for the decisions that led us here,” adds Pierre.

He also mentions that this wasn’t the plan six months ago. “We’ve tried to avoid layoffs at all costs by evaluating various scenarios, decreasing costs & improving unit economics over the last nine months to pave the way forward.”

The decision to lay off employees will largely impact the company’s Barcelona headquarters, in areas including business support functions, recruitment and data. No front-line workers, pickers, or couriers will be impacted. The process will adhere to local laws and practices in all impacted countries.

Pierre adds, “It will be tough and hard to say goodbye to so many who have worked hard to build Glovo over the last years and are directly affected. I’m deeply sorry for that…”

About Glovo

Founded in 2015 by Gerard Olive, Miguel Vicente, Oscar Pierre, and Sacha Michaud, Glovo connects customers with independent local couriers who acquire goods from any restaurant or shop in a city. It also delivers urgent packages for a variable fee.

The company operates in over 1,500 cities in 25 countries across Europe, Central Asia, and Africa.

The reason behind downsizing

Since its inception in 2015, Glovo claims to have witnessed a triple- or high-double-digit rate each year, and hence had to scale its workforce quickly. However, the development led to inefficiencies in the company’s operations, despite taking measures with spending and operational expenditures.

“This is something we identified in early 2022, and we were planning to correct those inefficiencies gradually over the course of this year by carrying out an in-depth analysis of each department,” says Óscar Pierre.

In the first three quarters of 2022, Glovo successfully surpassed its topline growth targets, which led the company to predict the same for the year 2023. However, in October 2022, the growth instead began to slow down which led to a downturn in Glovo’s topline yearly growth rates.

According to the blog post, recently published results from other delivery companies have also shown a slowdown in demand in Q4, which confirms that external factors are impacting the performance of the industry. 

“The current macroeconomic situation, with rising interest rates and inflation, lowers the purchasing power of consumers, and hence, some choose to order less often,” says Pierre.

“Although we still expect strong double-digit growth for 2023, we have needed to adjust our forecast to reflect this new reality. With so much economic uncertainty in the short-term future, it will be even more important to keep our costs low and streamline our business,” says Pierre.

What’s next?

Glovo says its industry has a bright future. The company claims that its platform has changed the consumption habits of millions of users and has already digitised over 100,000 small businesses.

“I would not be surprised to see food orders grow above 10-fold before the end of this decade,” says Pierre. “On top of that, we are just scratching the surface in many categories in our marketplace, such as groceries, retail, or pharma, and adjacent opportunities like Ads, Gas and Fintech.”

“Our vision and strategy have not changed. Today is a difficult day. For those leaving, I want to thank each and every one of you for your work in helping us build Glovo. We truly appreciate your time with Glovo and wish you all the best,” Pierre concludes.

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Vishal Singh

Vishal Singh is a News Reporter and Social Media Marketing Lead at Silicon Canals. He covers developments in the European startup ecosystem and oversees the publication's social media presence. Before joining Silicon Canals, Vishal gained experience at the Indian digital media outlet Inc42, contributing to its growth with insightful content. Despite being a college dropout, his passion for writing has driven his career in journalism.

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