US-Based Grocery Delivery Company Instacart To Lay Off 250 Workers In Restructuring Exercise

Mumbai: US-based grocery delivery company Instacart has announced to lay off about 7 percent of its global workforce, or about 250 employees, as part of a restructuring plan.

Fourth-Quarter Earnings and Restructuring Details

The announcement came as the company posted fourth-quarter earnings that were approximately in line with analysts' revenue expectations. According to a filing with the US Securities and Exchange Commission (SEC), Instacart stated that the restructuring plan includes a reduction of approximately 250 employees, representing approximately 7 per cent of the company's global workforce as of January 31, 2024. Most of these reductions are expected to occur by March 31, 2024.

Financial Impact and Future Outlook

The company estimates to incur approximately $19 to $24 million in non-recurring charges in connection with the restructuring plan, predominantly related to cash expenditures for employee transition and severance payments, as well as employee benefits. According to Instacart, $17 to $22 million of the total restructuring expenses is expected to result in future cash outlays. (Also Read: RBI Asks Visa, Mastercard To Stop Card-Based Commercial Payments)

Focus on Organizational Structure and Major Projects

Instacart indicated that the layoffs are aimed at middle management and creating a flatter organizational structure, as well as focusing teams on major projects such as advertising efforts on platforms like Roku and Google Ads.

Leadership Changes

Chief Operating Officer (COO) Asha Sharma also informed the company to resign from her position, effective March 1, 2024. The company does not plan to hire or appoint a new COO at this time. (Also Read: India’s 16th Finance Commission Holds First Meeting Chaired By Economist Arvind Panagariya)

Instacart's Operations and Growth

According to its website, Instacart shoppers and drivers deliver groceries to over 5,500 cities from over 85,000 supermarkets and other retailers. The business experienced growth during the Covid-19 outbreak as people avoided public places.