Instacart Slashing Workforce
Delivery platform Instacart revealed that it would lay off about 250 employees, or approximately 7% of the company, as it restructures, according to a letter to shareholders. CEO Fidji Simo said in the letter that the move “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.” These initiatives include its advertising collaborations with Roku and Google Ads.
In tandem with the workforce reduction, three c-suite executives are leaving the San Francisco-based company for personal reasons, according to a CNBC report: COO Asha Sharma, who was a Progressive Grocer Top Woman in Grocery in 2022 and 2023; CTO Varouj Chitilian; and Chief Architect JJ Zhuang. Instacart will fill only the CTO role.
[RELATED: Instacart Releases 1st Earnings Report Since Going Public]
News of the job cuts came as the company reported its fourth-quarter financial results, which included total revenue of $803 million, a 6.0% year-over-year increase but still slightly below Wall Street estimates. Orders and GAAP gross profit were both up 5% year over year, although GAAP net profit was down $331 million year over year, “reflecting a prior-year health benefit from the release of the vast majority of our tax valuation allowance.”
As part of its Q1 fiscal 2024 outlook, Instacart said that it expects adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of between $150 million and $160 million.
In the letter, Simo noted “our solid Q4 results, which demonstrated ongoing momentum in order and GTV [gross transaction value] growth, expanding profitability, and increasing share of sales in both small and large baskets compared to other digital-first platforms based on third-party data.” She added that “we expect a strong start to 2024, with Q1 year-over-year GTV growth anticipated to accelerate for a fourth consecutive quarter.”
