Instacart is laying off approximately 1,800 employees as it transitions to a “Partner Pick” model for grocery services.
The company made the acknowledgement in a Medium blog post on Tuesday, noting, “we’ll be winding down our in-store operations at select retailer locations over the coming months.” The line was included about two-thirds of the way down in a larger post about the new Instacart Pickup Retailer models.
The layoffs, reported by Bloomberg to be about 1,900 and by CNN Business to be approximately 1,800, include the only 10 unionized employees in the company’s operation. Instacart has more than 500,000 workers, adding nearly 250,000 following the onset of COVID-19 as demand for its services increased 500%.
In a letter obtained by Tech Crunch, Joseph E. Santucci Jr., partner at law firm Stinson, informed the United Food and Commercial Workers International Union (UFCW), which represents 10 in-store shoppers (ISSs) at Mariano’s in Skokie, Illinois, that their jobs were being eliminated. The letter states that over 366 ISSs at Kroger-owned stores, including Mariano’s, and “over fifteen hundred ISSs working at other grocery chains” will see their employment end “as a result of our new Partner Pick model.”
“Instacart has made multiple, similar adjustments to the ISS workforce since 2018. These adjustments have been part of a continuous effort to evaluate and evolve our operations to best suit our clients, partners, and business,” the letter said.
The job cuts will be completed in the first and second quarters, the letter noted.
Vice reported that the Skokie workers voted to unionize in early 2020 but had yet to formalize a contract with Instacart.
Partner Pickup seeks to alter the dynamic by which consumers receive food from the service. Citing the growth of curbside pickup at grocers nationwide, Instacart said it is responding to offer its store partners more flexible options.
“Instacart has been engaging in discussions with its retail partners about various options designed to support their changing needs as grocery e-commerce becomes even more integral to their businesses,” the letter stated, noting that ISSs are “significantly more expensive on a cost-per-delivery basis than using a pure [full-service shopper] model.”
Instacart said it has rolled out Instacart Pickup curbside service at more than 3,300 stores nationwide in 30 states, including at ALDI, Food Lion, Publix, Sprouts and Wegmans.
The company envisions a flexible retailer option that offers the ability to engage consumers with either Partner Pick or In-Store Shopper pick.
“Through Partner Pick, retail employees will utilize Instacart’s new pickup technology built specifically for each retailer to enable them to fulfill Instacart Pickup orders for customers,” Instacart wrote in the Medium post.
Some locations will continue to utilize Instacart in-store shoppers.
“These changes come as part of Instacart’s ongoing commitment to innovating for our partners, providing an essential service for our customers, and supporting our entire Instacart shopper community for years to come as our business continues to evolve in support of the entire grocery industry,” it wrote.