Nearly 200 Postmates employees got pink slips Monday in the wake of being acquired by Uber, but top Postmates executives will get “multimillion dollar exit packages.”
There’s an old misconception in the tech industry that it’s a good thing when your startup gets acquired by a larger company. It’s good for the investors, alright, but often not so much for the startup’s staff, who are often gutted like a fish. Just ask the approximately 185 employees of San Francisco-based Postmates, whose acquisition by Uber was announced last summer and was approved in mid-November. But just a mere two months later, the New York Times reports that Uber has laid off 15% of Postmates staff. They’ll keep the Postmates app active, but structurally, they’re folding everything into the growing but still massively unprofitable Uber Eats operation.
News: Layoffs hit roughly 185 Postmates employees, or 15 percent of its workforce, as Postmates is absorbed into Uber Eats. Hundreds more may exit later as contracts end.— rat king (@MikeIsaac) January 24, 2021
Comes months after Uber's $2.65 billion acquisition of Postmates.https://t.co/jbRyE55W9Y
According to the above tweet from Times reporter Mike Isaac, those “15%” and “approximately 185 employees” figures may prove to underestimate the true degree of the job losses. Isaac tweets that "Hundreds more may exit later as contracts end." That’s a quick assessment of the reality that temps and contract workers often outnumber salaried employees at tech companies, so in terms of real Bay Area workers losing their jobs, there are several more rounds of bloodletting to come in the Uber-Postmates layoffs.
In all seriousness, Friday was my last day at Uber/Postmates. I will be consulting for a while should they need my help. But I doubt they do.— Bastian Lehmann (@Basti) January 26, 2021
The Times adds that “Some Postmates vice presidents and other executives will leave with multimillion dollar exit packages.” One of those with a big golden parachute will surely be that of Postmates founder Bastian Lehmann, whose tone-deaf tweet above comes as hundreds of his employees just lost their jobs during a pandemic. Granted, it’s just two tweets in a longer thread. But at no point does he say anything nice or conciliatory toward these hundreds of former team members who are newly unemployed, his praise only kisses upwards to Uber executives and their “remarkable job throughout this transaction and transition.” He then delves into his plans for his enormous severance package, which includes the self-congratulatory “I will invest my own money and that of a few friends in startups,” and “We will focus on early stage founders.”
An Uber spokesperson could at least articulate a kind word or two to those laid off. “We are so grateful for the contributions of every Postmates team member,” Uber spokesperson Matt Kallman told the Times. “While we are thrilled to officially welcome many of them to Uber, we are sorry to say goodbye to others. We are so excited to continue to build on top of the incredible work this remarkable team has already accomplished.”
Previous NY Times reporting on the acquisition notes that the combined forces of Uber Eats and Postmates amounts to a 37% share of the US food delivery market, which still trails DoorDash’s 45%, but is substantially better than GrubHub’s 17%. That may be an ultimately meaningless metric, because as the Wall Street Journal reported earlier this year, none of these companies are profitable even as the pandemic keeps us all shut-in at home. Downsizing may be the answer for Uber Eats, but if delivery apps can’t even turn a profit while stay-at-home orders cover much of the state and nation, it’s tough to imagine circumstances under which they could ever be profitable.
Image: Postmates sign is displayed next to other deliver companies at a restaurant on July 6, 2020 in San Francisco, California. Uber announced plans to buy restaurant delivery company Postmates for $2.65 billion in an all-stock deal. (Photo by Justin Sullivan/Getty Images)