Instacart Layoffs: Nearly 2,000 Jobs Eliminated

Instacart is planning workforce reductions affecting approximately 2,000 employees, including the ten unionized individuals working at Mariano’s, a Kroger-owned store, as reported by Vice. These employees are responsible for the tasks of selecting and preparing customer grocery orders within the stores.

Vice indicates that these ten employees are represented by the United Food and Commercial Workers Local 1546, based in Skokie, Illinois. Despite their unionization, a collective bargaining agreement with Instacart has not yet been finalized, according to Vice. Instacart informed the union about these upcoming changes earlier this week. The company’s communication stated its intention to discontinue utilizing in-store shoppers at Kroger-owned stores, including the Mariano’s location in Skokie, during the first and second quarters of the current year, with a start date no sooner than mid-March.

Instacart currently states it is actively seeking opportunities to transition affected employees to positions with retail partners or to other grocery stores that continue to employ Instacart shoppers. The company reports that around 1,800 employees will be impacted by these changes overall. Instacart has stated that those who are laid off will receive severance packages. However, the UFCW reports that Instacart is offering separation payments ranging from $250 to $750 to the affected workers.

Instacart alluded to these potential layoffs in a recent blog post discussing a new pickup retailer model. The post detailed a shift towards what Instacart is calling “Partner Pick,” where retailers will utilize their own employees, supported by Instacart’s technology, instead of relying on Instacart shoppers for order fulfillment.

“Due to some grocery stores adopting the Partner Pick model, we will be scaling back our in-store operations at certain retail locations in the coming months,” a representative from Instacart explained in a statement to TechCrunch. “We recognize this is a difficult period for many, particularly during the ongoing COVID-19 pandemic, and we are committed to supporting our in-store shoppers through this transition. This support includes exploring opportunities to transfer shoppers to other retailer locations with open Instacart in-store shopper roles, collaborating with our retail partners to identify hiring possibilities for impacted shoppers, and providing resources to assist shoppers in their job search. We are also providing all affected shoppers with separation packages based on their length of service with Instacart.”

These developments occur as Instacart prepares for its initial public offering (IPO). Reuters reported in November that Instacart selected Goldman Sachs to lead the IPO, with a valuation of $30 billion. This represents a significant increase from the $17.7 billion post-money valuation Instacart achieved in October through a $200 million funding round.

In a public statement, Marc Perrone, president of the UFCW International, described these workers as essential during the COVID-19 pandemic and urged Instacart to reconsider these planned layoffs.

“Instacart’s decision to terminate the employment of its only unionized workers and eliminate the jobs of nearly 2,000 dedicated frontline employees amidst this ongoing public health crisis is unacceptable,” Perrone stated. “As the union representing Instacart grocery workers in the Chicago area and grocery workers across the nation, the UFCW is demanding that Instacart immediately halt these plans and prioritize the well-being of its customers by protecting the jobs of these courageous essential workers when our communities need them most.”