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After being hired in huge numbers, US delivery workers are losing their jobs

Amazon and Target packages in the back of a delivery truck
Reuters/Jeenah Moon
The pandemic was a boon for delivery jobs.
  • Michelle Cheng
By Michelle Cheng

Reporter

Published

As the US economy continues to open up, the April jobs report from the US Bureau of Labor Statistics shows the boom in delivery jobs has taken a tumble.

The number of people employed as “couriers and messengers” fell 7%, to 1,009,000, from the month before. The industry covers workers who deliver and pick up packaged good, employed by companies like Amazon, Fedex, and DHL.

When the Covid-19 pandemic halted the world and people stayed home, the demand for online retailers, online grocers, delivery firms shifted into high-gear. In March 2020, Amazon went on a hiring spree—announcing that it will hire 100,000 workers in the US and raise pay for workers in the US, Canada and Europe. Delivery food apps like Grubhub and DoorDash saw a surge in demand for their services.

But now that demand appears to be fading.

“The notable decline did come as a surprise, although it’s important to keep in mind that we don’t know how much of this is a definitive trend as monthly data can be volatile,” says Daniel Zhao, a senior economist at Glassdoor. He adds that BLS data can be especially volatile for smaller industries like couriers and messengers due to smaller sample sizes.

What’s happening with delivery workers?

There’s been speculation about how much delivery is here to stay. In the middle of the pandemic, a Deloitte study (pdf) of food delivery in October found nearly a quarter of consumers expect the delivery increase to be permanent, largely citing convenience. But companies may have anticipated a decline in demand and are adjusting headcount accordingly.

Even before the pandemic, delivery was growing. The sector does not include gig workers but Zhao says trends affecting them may also show up in the jobs report.

Uber’s CEO Dara Khosrowshahi said this week in an earnings call he is seeing drivers “drive less food and more people because the demand for people—that’s higher.” Gig companies like Uber are facing a driver shortage in part due to health risks, but that detail may suggest some industry-switching as food delivery workers become drivers.

Zhao says that the gig economy is driven by flexible workers who are able to easily shift their skills towards in-demand industries. He gives the example of how this trend played out with hard-hit restaurant workers, who pivoted their skills to search for e-commerce and warehousing jobs on Glassdoor. “[A]s the economy reopens, these delivery workers may head back towards their pre-pandemic industries,” he says.

Meanwhile, as pandemic-related restrictions continue to lift, employment in leisure and hospitality increased 331,000. More than half of the increase was in food and services and drinking places, suggesting that people are going out again.

“What we might be seeing is a shift back to pre-pandemic behavior as the economy opens up,” says Zhao. “As the public health situation improves, more people may be swapping their delivery routines for in-store shopping.”

Correction: A previous version of this story reported that delivery jobs fell 77%. The article has been updated with the correct figure, which was a 7% decline.

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