Instacart Cuts 250 Jobs Amid Sluggish Ad Business

February 15, 2024: Instacart, the grocery delivery behemoth, has announced a workforce reduction of approximately 250 employees, representing roughly 7% of its global staff. This strategic move, communicated to employees and shareholders on February 13th, 2024, comes from a slowdown in the company’s advertising business, a previously robust revenue stream.

While Instacart’s core grocery delivery operations remain resilient, with first-quarter gross transaction value (GTV) and core profits surpassing analyst expectations, the company acknowledges the need to adapt to changing market conditions. Chief Executive Officer Fidji Simo emphasized that the layoffs are aimed at “refocusing resources on promising initiatives that will transform our company and industry over the long term.”

Instacart’s advertising platform, launched in 2020, initially enjoyed remarkable growth. However, recent quarters have witnessed a deceleration in this segment, prompting the company to reassess its priorities. Instacart seeks to navigate this shift and secure a sustainable future by streamlining its workforce and prioritizing core grocery delivery operations.

It is important to note that this workforce reduction does not translate to completely abandoning the advertising business. In her communication to employees, Simo reassured them that “advertising remains a valuable part of our strategy,” albeit with a scaled-down presence.

The news of the layoffs has elicited mixed reactions. While some industry observers commend Instacart’s proactive approach to adapting to market changes, others express concern for the impacted employees and the potential impact on company morale.

Despite the immediate challenges, Instacart remains confident in its long-term trajectory. The company’s core grocery delivery business continues to thrive, and the recent workforce reduction is viewed as a strategic effort to optimize resources and ensure future success.