Why is Instacart Downsizing Its Workforce?

Instacart layoffs impact 250 employees, equivalent to about 7% of its total workforce, in a bid to restructure its operations. Instacart layoffs announcement coincided with the release of the company’s fourth-quarter earnings, which closely matched analysts’ revenue predictions. However, despite the expected figures, the company’s shares experienced a 5% dip in after-hours trading.

The restructuring initiative primarily targets middle management positions, aiming to streamline the organizational hierarchy and focus teams on key initiatives, such as expanding advertising efforts on platforms like Roku and Google Ads. Additionally, three high-ranking executives—Chief Operating Officer Asha Sharma, Chief Technology Officer Varouj Chitilian, and Chief Architect JJ Zhuang—are stepping down from their roles for personal reasons. Instacart plans to fill only the CTO position among these departures.

How Did Instacart Perform in its Recent IPO?

For the fourth quarter, Instacart reported revenue of $803 million, aligning closely with Wall Street’s estimate of $804 million, according to analyst data from LSEG (formerly Refinitiv). This financial update comes after Instacart’s notable IPO in September, which marked one of the first substantial venture-backed tech IPOs since December 2021. In its IPO prospectus, the company emphasized its commitment to integrating artificial intelligence and machine learning features into its platform, anticipating these advancements to fuel future growth.

Instacart has become a household name because of the pandemic, when consumers sought alternatives to in-person shopping. Its shoppers and drivers serve customers in over 5,500 cities and partner with more than 85,000 grocers and retailers.

Severance Entitlement for Instacart’s Employees

In Canada, non-unionized employees, and executives at Instacart are entitled to receive comprehensive severance pay in situations of job loss arising from downsizing or corporate restructuring. The amount of severance pay is contingent upon several factors and has the potential to reach up to 24 months’ worth of compensation.

At Whitten & Lublin, we recognize the challenges associated with job loss or termination, and our seasoned employment lawyers are available to assist in navigating legal options. Our goal is to ensure individuals receive the compensation they are entitled to. We encourage anyone affected by recent layoffs in Canada to reach out for a consultation, either online or by phone at (416) 640 -2667, to discuss their situation today.