Instacart cutting 250 jobs; three C-suite execs to leave
Instacart is undergoing a restructuring plan that will include a roughly 7% workforce reduction as three top executives depart the company.
In an 8-K filing with the Securities and Exchange Commission (SEC), the grocery technology company said its board of directors has approved a restructuring plan designed to “improve operational efficiencies and better align the Company’s organizational structure with current business needs, top strategic priorities, and key growth opportunities.”
The plan includes a reduction of approximately 250 employees, representing approximately 7% of the company’s global workforce as of Jan. 31, 2024, with most of these reductions expected to occur by March 31, 2024. Instacart said it will follow “local consultation or process requirements” involved with any layoffs.
In addition, Instacart said COO Asha Sharma, CTO Varouj Chitilian and chief architect JJ Zhuang will all be leaving the company for personal reasons.
The company estimates it will incur approximately $19 to $24 million in non-recurring charges in connection with the restructuring plan, mostly due to cash expenditures for employee transition and severance payments and benefits. Instacart expects the majority of the charges to be recognized in the first quarter of 2024.
Instacart debuted as a public company on the Nasdaq Global Select Market exchange in September 2023 with a valuation of roughly $10 billion. In a previous SEC filing, the company said it had a history of losses and had only recently began generating profit, and as of June 30, 2023, had an accumulated deficit of $735 million.
However, Instacart also just reported total revenue of $803 million in the fourth quarter of fiscal 2023, up 7% year-over-year and in line with analyst expectations. Net income of $135 million was down $331 million year-over-year, which Instacart attributed to the impact of a prior year tax benefit.
The company also authorized an additional $500 million for share repurchases, bringing its total share buyback plan to $1 billion.
"We’re positioning Instacart to take on our most ambitious bets while streamlining how we operate," Instacart CEO Fidji Simo said in a letter to shareholders dated Feb. 13, 2024. "Today, we made the tough decision to part with approximately 250 of our team members. This 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. I am confident this will enable us to execute with even more focus and efficiency moving forward."
Headquartered in San Francisco, Instacart partners with more than 1,400 national, regional and local retail banners to facilitate online shopping, delivery and pickup services from more than 80,000 stores across North America on the Instacart Marketplace.