Instacart announced that it will lay off 1,877 employees of its 10,000 grocery store workers. The company said that the lay-off is due to the shift in company strategy towards outsourcing its technology so that grocery stores can prepare their own orders.
- The employees who are likely to lose their jobs are those who prepare customer orders but hand them over to others for delivery. Instacart said that cutting the positions would also help in streamlining its operations so that the same contractors can fulfill and deliver the order.
- Instacart said that it provides a $250-750 severance package and transition assistance to place the affected employees either within the company or in its retailers' network.
- The lay-off will include the 10 workers who formed a union last year. Instacart has around 500,000 part-time workers. It participated in the successful $200M campaign to pass Prop 22, which exempted gig-economy companies like Uber and Lyft from classifying its workers as employees.
- The company raised $200M at $17.7B valuations last October and is reportedly planning to go public at a valuation of $30B.
- Instacart started as a grocery delivery service provider but has forged partnerships with companies like Walmart, Sephora, and 7-Eleven. The company's order volume increased by 500% last year.