Grocery delivery service Instacart announced Tuesday it would lay off 7%, or 250 middle management employees, in a restructuring to keep rising food costs from eating into its profit margin. File photo by Gary C. Caskey/UPI/ |
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Feb. 14 (UPI) -- Instacart is the latest tech company to lay off workers, as the grocery delivery giant announced Tuesday it would cut roughly 7% of its staff to keep increased competition and rising food costs from eating into its profit margin.
"Today, we made the tough decision to part with approximately 250 of our talented team members," Instacart chief executive officer Fidji Simo wrote in a letter to investors, despite fourth-quarter earnings of $803 million landing within analysts' estimates.
"This will allow us 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 added. "I am confident this will enable us to execute with even more focus and efficiency moving forward."
Tuesday's layoffs focused on Instacart's middle management. The grocery service is the latest tech firm to reduce its workforce in the past month. Google, Microsoft, Snapchat, DocuSign, eBay and PayPal have all announced sizable layoffs.
According to an SEC filing, Instacart had 3,486 employees as of June 2023. The layoffs will allow it to structure the organization with current "business needs, top strategic priorities and key growth opportunities," as it allocates teams to larger projects.
Instacart's chief operating officer, chief technology officer and chief architect will also leave the company for "personal reasons." Instacart said it only plans to fill the CTO role.
Instacart took off during the COVID-19 pandemic as shoppers and drivers delivered groceries to consumers at home in more than 5,500 cities, according to its website. The company went public last September.
"Our consumer product is the best it has ever been, enabling us to invest more than we ever have before on marketing and incentives that have the ability to resurrect and attract new users as well as deepen engagement with existing users," Simo wrote.
"We're doing all of this while maintaining our relentless focus on profitable growth and our long-term financial targets."
