Grubhub Cuts 23% of Workforce as Wonder Group Reshapes Its Future

A Workforce Slashed: What’s Happening at Grubhub?

Grubhub, once a dominant force in the U.S. food delivery market, has announced a major round of layoffs, cutting approximately 500 employees—23% of its workforce. The move comes just weeks after the company’s $650 million acquisition by Wonder Group, the parent company of Blue Apron.

This restructuring is part of an aggressive cost-cutting effort as Grubhub integrates with Wonder’s broader meal service ambitions. CEO Howard Migdal framed the layoffs as a necessary step to remove redundancies and flatten management layers. But beneath the corporate jargon, this signals something much bigger: Grubhub is no longer competing as an independent giant but instead being absorbed into a broader “super app” vision for mealtime convenience.

The layoffs affect teams across the board, echoing a previous 400-job reduction in 2023. The company has struggled to keep pace with DoorDash and Uber Eats, both of which continue to widen their lead in market share. This latest restructuring raises critical questions: Is Grubhub being stripped down for survival, or is this the beginning of a radical reinvention?

A $7.3 Billion Company Now Worth $650M—What Went Wrong?

The sale of Grubhub for $650 million is a dramatic fall from its $7.3 billion price tag in 2021, when **Just Eat Takeaway ** acquired it. This represents a 91% devaluation in just four years—a brutal reset that underscores Grubhub’s decline amid shifting market dynamics and regulatory pressures.

Why Did Grubhub Lose Its Edge?

Market Share Erosion: Grubhub’s U.S. market share has shrunk to just 8%, while DoorDash dominates with over 60% of the market. Uber Eats remains a solid second.
Regulatory Headwinds: Cities like New York imposed fee caps, squeezing Grubhub’s margins.
Shifting Consumer Preferences: More customers are opting for grocery delivery and direct restaurant ordering over traditional third-party platforms.
Competitive Pricing Pressure: Unlike DoorDash, which aggressively subsidized orders, Grubhub struggled to maintain competitive pricing while remaining profitable.
Operational Inefficiencies: Even after cost-cutting measures, Grubhub remained bloated with legacy inefficiencies.

JET, eager to offload an underperforming asset, cut its losses and took the steep discount, allowing Wonder Group to scoop up Grubhub at a bargain price. But now, Wonder must prove it can do what JET could not—turn Grubhub into a viable, growing business.

Wonder’s Grand Vision: Can It Transform Grubhub Into a ‘Mealtime Super App’?

Wonder Group, founded by Marc Lore (the former CEO of Walmart eCommerce U.S.), isn’t just a food delivery company—it’s attempting to build an integrated “super app” for meals, combining restaurant deliveries, meal kits (via Blue Apron), and in-house virtual dining brands.

How Grubhub Fits Into Wonder’s Strategy

Expanded Delivery Network: Grubhub’s existing partnerships with hundreds of thousands of restaurants could enhance Wonder’s reach.
Cross-Selling Opportunities: Wonder can now offer its own brands, Blue Apron meal kits, and restaurant meals on a single platform.
Operational Synergies: By consolidating logistics and tech infrastructure, Wonder aims to reduce costs and increase efficiency.
Diversification Beyond Restaurants: Unlike DoorDash and Uber Eats, Wonder wants to integrate more direct-to-consumer food options, giving it a unique position in the market.

If successful, this could create a new hybrid category in food delivery—a model that blends delivery, meal prep, and proprietary restaurant concepts into one seamless experience.

The Risks: Is This a Smart Bet or Just a Last-Ditch Effort?

While the concept of a food “super app” is ambitious, execution will be the deciding factor. Here’s why investors remain cautious:

1. Layoffs Could Disrupt Operations & Service Quality

A 23% workforce reduction isn’t just a numbers game—it risks weakening customer service and delivery efficiency. If remaining employees are overburdened, it could damage Grubhub’s reputation further.

2. Integration Challenges Could Slow Momentum

Merging Grubhub’s legacy infrastructure with Wonder’s newer, vertically integrated approach could lead to delays, friction, and costly missteps. The challenge isn’t just technological—it’s also cultural.

DoorDash and Uber Eats continue to set the industry standard for pricing, speed, and restaurant selection. If Grubhub can’t offer a compelling alternative, it risks becoming an afterthought in a consolidating industry.

4. Regulatory and Economic Pressures Persist

Fee caps, minimum wage laws for gig workers, and economic slowdowns could further strain profitability. If cost-cutting measures go too far, service quality and restaurant partnerships could suffer.

Investment Takeaways: Is Grubhub’s Rebirth Worth Betting On?

For investors, the Grubhub-Wonder merger presents both risk and opportunity:

✅ Potential Upside

If Wonder executes well, Grubhub could diversify beyond traditional food delivery and carve out a unique market niche.
Cost synergies could improve profitability if integration is handled smoothly.
A multi-service meal platform could prove more resilient to competition than standalone food delivery services.

❌ Major Risks

The steep devaluation of Grubhub underscores deep-seated industry challenges.
DoorDash and Uber Eats continue to dominate, leaving Grubhub with an uphill battle.
Operational disruptions from layoffs and a complex integration process could further weaken the brand.

Grubhub’s Transformation Is a High-Stakes Gamble

The Wonder-Grubhub deal is not just a routine acquisition—it’s a bet on redefining the future of food delivery.

If Marc Lore’s “super app” vision works, this could pioneer a new category in mealtime convenience, forcing competitors to rethink their own models. However, if the integration stumbles or fails to resonate with customers, Grubhub may continue its downward spiral, trapped between cost-cutting and fading market relevance.

For investors, this is a high-risk, high-reward scenario. While the potential upside exists, a wait-and-see approach may be the safest move until Wonder proves it can reverse Grubhub’s fortunes.

Grubhub Cuts 23% of Workforce as Wonder Group Reshapes Its Future