Uber is laying off more than 180 employees from its newly acquired Postmates business, according to the New York Times.
Postmates CEO and co-founder Bastian Lehmann is also leaving the company, along with most of the executive team, according to the report that was confirmed to Restaurant Business by an Uber Eats spokesperson.
The layoffs are not necessarily surprising as Uber brings the smaller Postmates into the fold and works to integrate the service with its own delivery arm, Uber Eats.
Uber agreed in July to acquire Postmates for $2.65 billion in stock, viewing the company as a way to help it become profitable and expand its presence out West. The two combined make up the second-largest delivery provider in the U.S.
From a consumer perspective, Uber Eats and Postmates will remain separate entities with their own apps and marketplaces. But they will gradually combine delivery and merchant networks, a process that was to begin this year with a national “listening tour” with merchants to learn more about their needs.
Lehmann started Postmates in 2011 in San Francisco with co-founders Sean Plaice and Sam Street with the goal of providing an online delivery solution. It grew to become the fourth-largest delivery provider in the U.S., accounting for about 7% of sales in December, according to consumer analytics firm Second Measure.