Instacart revealed on Tuesday its decision to lay off approximately 250 employees, constituting roughly 7% of its workforce, as part of a restructuring initiative.
This announcement coincided with releasing the company’s fourth-quarter earnings, which closely matched analysts’ revenue forecasts.
Following this news, the company’s shares experienced a 5% decline in extended trading.
The layoffs primarily target middle management positions, aiming to establish a more streamlined organizational setup.
Additionally, Instacart plans to concentrate its teams on larger-scale endeavors, such as advertising campaigns on platforms like Roku and Google Ads.
In a statement, Instacart disclosed the departure of three high-ranking executives—Chief Operating Officer Asha Sharma, Chief Technology Officer Varouj Chitilian, and Chief Architect JJ Zhuang—for personal reasons.
The company intends to fill only the vacant Chief Technology Officer position.
Reportedly, Instacart’s fourth-quarter revenue amounted to $803 million, almost matching Wall Street’s expectation of $804 million, per analyst projections from LSEG, previously known as Refinitiv.
In September, Instacart made its public debut in one of the most noteworthy venture-backed tech IPOs since December 2021.
In its prospectus, the company outlined plans to integrate artificial intelligence and machine learning functionalities into its platform, anticipating these innovations to propel future business growth.
According to its website, Instacart’s network of shoppers and drivers operates across more than 5,500 cities, serving over 85,000 grocers and retailers.
The company experienced rapid growth during the Covid-19 pandemic as consumers sought alternatives to in-person shopping.
However, profitability remains a persistent challenge, typical of much of the gig economy, largely due to substantial expenses associated with contractor payouts.
