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Instacart Cuts 250 Jobs as Stock Falls
February 14, 2024
Instacart, the grocery delivery retailer, made a new move on Tuesday, slashing about 250 jobs, which amounts to approximately 7% of its workforce. This decision was part of a larger restructuring effort. The company revealed this news alongside its fourth-quarter earnings report, which matched analysts’ revenue predictions.
Following the announcement, Instacart’s stock plummeted by 5% in after-hours trading.
The layoffs primarily targeted middle management positions, aiming to streamline the company’s hierarchy into a flatter structure. Additionally, Instacart intends to refocus its teams on bigger initiatives, including advertising efforts on platforms like Roku and Google Ads.
In another notable development, three high-ranking executives are leaving the company for personal reasons: Chief Operating Officer Asha Sharma, Chief Technology Officer Varouj Chitilian, and Chief Architect JJ Zhuang. Instacart will not be immediately replacing the CTO position.
Despite the layoffs, Instacart managed to meet revenue expectations, reporting fourth-quarter earnings of $803 million, almost identical to the $804 million anticipated by Wall Street analysts, according to data from LSEG, formerly known as Refinitiv.
Instacart, which went public in September, emphasized its commitment to integrating artificial intelligence and machine learning technologies into its platform. The company believes these advancements will drive future growth.
Currently, Instacart operates in over 5,500 cities, partnering with more than 85,000 grocery stores and retailers. Its services gained significant traction during the COVID-19 pandemic, as consumers sought alternatives to shopping in person. However, like many businesses in the gig economy, Instacart faces challenges in achieving profitability, largely due to the high costs associated with contractor payouts.
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