Glovo to lay off 6.5% of its global workforce

Popular delivery service, Glovo has announced its decision to reduce its global workforce by 6.5% due to a drop in orders and other inefficiencies after the COVID-19 pandemic drove a hiring surge.

The statement further disclosed that about 250 employees to be let go would be across the business support functions, recruitment and data departments in the company headquarters in Barcelona. Couriers, pickers and front-line employees are unlikely to be affected by the layoff.

“The current macroeconomic situation, with rising interest rates and inflation, lowers the purchasing power of consumers, and some choose to order less often,” Chief Executive Oscar Pierre said in a statement, adding that “our vision and strategy have not changed”.

“The layoff decision largely impacts the company’s headquarters in Barcelona in areas such as business support functions, recruitment and data,” he confirmed.

Layoff comes amidst other problems for Glovo

The layoff is to curb the inefficiencies that needed to be corrected regarding Glovo’s growth because its rapid recent growth, which had seen its team size grow 40% year on year to 3,900 people today, depicts inefficiency.

Also, the adjustment to the system will enable Glovo to reduce “non-headcount-related operational expenses” and will only be hiring for “business-critical roles through the first half of 2023.

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, and this is why I believe it’s important for me to explain how we arrived at this decision and how I see the future of Glovo and our industry.

Chief Executive Oscar Pierre

This layoff decision was announced less than a week after Spain’s Labour Ministry fined Glovo, the local business of Germany’s Delivery Hero (DHER.DE), another 56.7 million euros ($62 million) for allegedly violating laws on hiring riders.

Reports revealed that the penalty was broken down into a €32.9 million fine for breaking labour laws, €19 million in unpaid social security contributions for the riders it had falsely claimed as self-employed, and €5.2 million for visa violations as the inspectors found Glovo to be employing several foreigners without a work permit.

Glovo has been fined 205 million euros for alleged breaches in Spain in recent years. Spain’s 2021 law was one of the first to regulate workers’ rights in the so-called gig economy in Europe.

It was reported that last year the European Union raided Glovo and Delivery Hero’s offices as part of an investigation into possible breaches of anti-competition law, with insiders telling Sifted that the company’s leadership did not take antitrust rules seriously.