Instacart, the leading grocery delivery company in the US, has announced that it will lay off about 250 employees, or 7% of its global workforce, as part of a restructuring plan. The company said that the move will help it streamline its operations and focus on its most promising initiatives. Instacart also revealed that three of its top executives will be leaving the company for personal reasons.
Instacart faces increased competition and challenges in the grocery delivery market
Instacart, which was founded in 2012, has grown to become the largest grocery delivery company in the US, with over 600,000 shoppers and 40,000 stores on its platform. The company saw a surge in demand during the Covid-19 pandemic, as more consumers opted for online shopping and delivery to avoid exposure to the virus. Instacart reported revenues of $803 million for the fourth quarter of 2023, slightly below analysts’ expectations of $804.7 million.
However, Instacart also faces increased competition and challenges in the grocery delivery market, as more retailers, such as Walmart, Kroger, and Amazon, are investing in their own delivery services and technologies. Instacart also has to deal with the high costs of paying and retaining its shoppers, who are independent contractors and not employees. Instacart has faced several lawsuits and protests from its shoppers over issues such as tips, wages, and working conditions.
Instacart lays off 250 employees and flattens its organization
In a letter to investors, Instacart CEO Fidji Simo said that the company has decided to lay off about 250 employees, or 7% of its global workforce, as part of a restructuring plan. Simo said that the layoffs will allow the company to “reshape the company and flatten the organization so we can focus on our most promising initiatives that we believe will transform our company and industry over the long-term.”
Simo said that the layoffs will affect mostly middle management positions, and that the company will provide severance packages and transition support to the affected employees. Simo also said that the company will continue to hire for other roles that are critical for its growth and innovation.
Simo also announced that three of the company’s top executives will be departing the company for personal reasons. They are: Asha Sharma, the chief operating officer; Varouj Chitilian, the chief technology officer; and JJ Zhuang, the chief architect. Simo said that the company will only backfill the CTO role, and that she will take over the responsibilities of the COO and the chief architect.
Instacart focuses on its core business and new opportunities
Simo said that the restructuring will enable Instacart to focus on its core business of grocery delivery, as well as to explore new opportunities in other areas, such as advertising, enterprise, and international expansion. Simo said that the company has seen strong growth in its advertising business, which allows brands and retailers to promote their products on Instacart’s platform. Simo also said that the company has signed new partnerships with enterprise customers, such as Staples, Sephora, and 7-Eleven, to offer delivery services for their products. Simo also said that the company is planning to launch its service in new markets, such as Canada, Mexico, and Europe.
Simo said that the company is confident that these initiatives will help it achieve its long-term financial goals and create value for its customers, partners, and shareholders. Simo said that the company is committed to being the leader in the online grocery market, and that it will continue to invest in its technology, products, and people.
