Spain's Glovo, part of Germany's Delivery Hero, said it planned to lay off 250 workers globally, citing a drop in orders and inefficiencies after the COVID-19 pandemic drove a hiring surge.
The layoffs, which will mainly affect Glovo's Barcelona offices, represent a 6.5% reduction in the company's global workforce.
"The layoff decision largely impacts the company’s headquarters in Barcelona in areas such as business support functions, recruitment and data," chief executive Oscar Pierre said in a statement.
"No couriers, pickers or front-line employees will be affected."
Recently, Barcelona's city hall approved a total ban on so-called 'dark stores' – distribution hubs used by companies that provide grocery home deliveries - joining other European cities such as Amsterdam that announced restrictions in 2022.
Such dark stores are like retail shops, but without any on-site sales, just deliveries from them. Delivery services expanded across Europe in recent years to meet soaring demand during the pandemic's lockdowns but have faced growing scrutiny from authorities because of their effects on neighbourhoods.
Decline In Demand
Pierre said Glovo's rapid growth since its launch in 2015 had created operational inefficiencies and that a slump in demand in the fourth quarter showed external factors were affecting the delivery industry's performance.
"The current macroeconomic situation, with rising interest rates and inflation, lowers the purchasing power of consumers, and some choose to order less often," Pierre said, adding that "our vision and strategy have not changed".