Just Eat Takeaway is letting go of around 1,700 delivery drivers with concerns it may be pivoting back towards the gig economy to save on costs.
A Just Eat spokesperson, quoted in The Telegraph, said the company is “reorganising and simplifying its delivery operations as part of the ongoing goal of improving efficiency.”
Part of the shake-up involves agency workers being replaced by freelance drivers.
Just Eat bosses believe hiring workers, which comes with additional costs such as holiday pay, meant it was facing steeper costs in the UK than competitors, according to The Telegraph.
As a result, the group will be moving away from its worker model for couriers in six cities in Britain.
Workers will still be hired on hourly wages in European markets, where labour laws are in place to give delivery couriers employment rights.
In the UK, however, efforts by unions to boost rights have failed.
Just Eat's main rival, Deliveroo, continues to classify riders as self-employed, meaning they are not entitled to certain benefits like holiday pay.
Drivers were reportedly informed of the decision today and given six weeks’ notice with pay.
Additionally, the culling of jobs will impact 170 full-time staff within its operations team.
Total customers fell by 9% in 2022, while inflation rising meant customers were spending roughly 3% less per order on average.
This is despite Just Eat returning to profit in 2022, with adjusted underlying earnings (EBITDA) of €19mln (£16.8mln), compared to a loss of €350mln in 2021.
Just Eat said it expects to remain profitable moving forward, with full-year adjusted EBITDA guidance of €225mln for 2023.