Dive Brief:
- Grubhub has announced the layoff of 500 employees as part of its integration process with its newly acquired owner, Wonder, according to a statement made by Grubhub CEO Howard Migdal on Friday.
- The affected employees will receive severance packages and outplacement services to assist them during this transition.
- Migdal indicated that these cuts are essential for Grubhub to “maximize our potential, create opportunities for leaders at Wonder and Grubhub to take on expanded roles and responsibilities in support of our shared vision, and enable us to focus our resources on our most important business objectives.”
Dive Insight:
Wonder completed its $650 million acquisition of Grubhub in January, which marked the end of Just Eat Takeaway’s nearly five-year ownership of the brand. During this transition, Wonder and Grubhub have been aligning their respective businesses to achieve an ambitious vision of becoming the primary destination for mealtime solutions, as expressed by Migdal.
Wonder’s acquisition is aimed at uniting convenience, speed, and a diverse selection of both first- and third-party restaurants, groceries, and meal kits within a single application. Since the acquisition, Grubhub has been focusing on enhancing its core operations and exploring new verticals. Last year, Grubhub made significant strides in its grocery delivery services by partnering with Mercato, an e-commerce platform that collaborates with over 950 retailers.
In August, Grubhub further expanded its grocery delivery capabilities by partnering with Albertsons. Moreover, the company has increased its hotel partnerships, including a recent collaboration with Hilton that offers mobile ordering and delivery at over 2,600 hotel locations. This partnership enhances Grubhub’s presence in the hotel sector, making it easier for guests to access dining options.
Additionally, Grubhub’s marketplace offerings have expanded to include on-demand delivery from Office Depot, which allows customers to purchase office supplies through the platform. This diversification reflects Grubhub’s strategy to broaden its service offerings and cater to various consumer needs. Such initiatives are pivotal for Grubhub’s ongoing efforts to enhance customer satisfaction and engagement.
Moreover, Grubhub has formed a partnership with Amazon, enabling Prime members to benefit from free Grubhub+ memberships. This collaboration was expanded last year to include access to Grubhub delivery directly through Amazon’s website and shopping app, further integrating Grubhub into the broader e-commerce landscape. This strategic move not only boosts Grubhub’s visibility but also enhances its competitive edge in the food delivery market.
On the other hand, Wonder is also making significant strides in its virtual food hall business. With a successful fundraising effort of $700 million last year, the company aims to expand its operations to 90 units in the Northeast by the end of this year. Currently, Wonder operates 38 locations, with 14 more listed as “coming soon,” showcasing its growth trajectory. This expansion is aligned with Wonder’s goal of delivering innovative dining experiences to consumers.
Furthermore, it’s worth noting that Wonder also acquired Blue Apron in 2023, further diversifying its portfolio and enhancing its capabilities in the meal kit delivery space. This acquisition allows Wonder to leverage Blue Apron’s established brand and customer base to support its overall growth strategy.
In conclusion, the collaboration between Grubhub and Wonder represents a significant step forward for both companies. Migdal emphasized the value of this partnership, describing it as a testament to their progress over the past year and a connection with a partner dedicated to innovation and competitive spirit. As these companies continue to evolve and adapt to the changing landscape of the food service industry, their combined efforts will play a crucial role in shaping the future of mealtime solutions.