Instacart Slashes 1,900 Jobs, Citing Pickup

Instacart is terminating about 1,900 jobs, including those held by workers in Illinois who voted last year to join the United Foods and Commercial Workers union (UFCW) according to Bloomberg and other media outlets.

In a letter to the union, Instacart told United Foods and Commercial Workers Local 1546 that it was making changes that would affect its bargaining unit working at Mariano’s store in Skokie, Ill. As part of the planned transition, Instacart said it “intends to offerâ€� those affected a chance to apply for jobs with the retail store where they currently work. 

The UFCW said the layoffs will impact a minimum of 20 percent of Instacart’s frontline positions.

“Instacart firing the only unionized workers at the company and destroying the jobs of nearly 2,000 dedicated frontline workers in the middle of this public health crisis is simply wrong,� Union President Marc Perrone said in an email to the Los Angeles Times.

The Silicon Valley delivery platform said it will extend compensation packages between $250 and $750 to workers affected by the layoffs. Instacart has approximately 500,000 full-service shoppers (FSS) who make deliveries, and less than 10,000 in-store shoppers (ISS) employed by Instacart.

“We know this is an incredibly challenging time for many as we move through the COVID-19 crisis, and we’re doing everything we can to support in-store shoppers through this transition,� Instacart said in a blog post on Medium.

The company said it collaborates with over 500 retailers and when it comes to online grocery, there isn’t a one-size-fits-all solution. Instacart also powers curbside pickup for more than 60 grocery partners, including ALDI, Food Lion, and Wegmans. 

“In 2020, we launched Instacart Pickup services across more than 2,000 new retailer locations, making the service available today at more than 3,300 stores across more than 30 states,� according to the blog post. “As a result of some grocers transitioning to a Partner Pick model, we’ll be winding down our in-store operations at select retailer locations over the coming months.�

The company said it would be introducing two “distinct Instacart Pickup models� — Partner Pick and Instacart In-Store Shopper Pick. It also plans to trial a new feature that enables full-service shoppers to fulfill pickup orders.

Goldman Sachs veteran Nick Giovanni was recently tapped to replace Chief Financial Officer Sagar Sanghvi as Instacart prepares for an initial public offering (IPO) led by Goldman Sachs.

Founder and Chief Executive Officer Apoorva Mehta said Giovanni has advised some of the biggest companies in the world.

Record growth and competition amid the pandemic prompted Instacart to give holiday bonuses of $50 to $500 to its gig workers. Last year was the busiest year in the company’s eight-year history.