Instacart is the latest tech firm in 2024 that will be laying off its staffers with 250 employees, 7% of its workforce, being let go.
In a letter to investors, Instacart CEO Fidji Simo said the layoffs, most of which affect the middle management, are part of its efforts to "reshape the company and flatten the organization."
Three top executives will also depart from the company with the position of the CTO being confirmed to be refilled.
The decision came after the company fell a bit short of Wall Street's predictions on the fourth-quarter revenue as its competitors' profit remained elevated even after the pandemic.
Instacart is among the notable companies announcing corporate-wide layoffs this February, continuing the trend of job cuts last month in the industry.
Instacart Leverages AI Tools Ahead of Layoffs
Before the layoffs, the food retailer announced that it would start using more AI tools in its platforms to "drive future growth in our business."
Just last month, Instacart came under fire for using AI-generated images to promote recipes on the website. The pictures were first noted on Reddit and were later reported by Business Insider.
Instacart has since quietly deleted the reported images but some can still be spotted on its website.
A spokesperson of the company told BI that its review team removed the images because they do not "deliver a high-quality consumer experience."
Instacart is still using machine learning tools for its in-app search feature and on its smart carts for its physical stores.
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Food Delivery Market Slows Down Post-Pandemic
Instacart first came into the food retail and delivery during the peak of the COVID-19 lockdown as consumer habits shifted towards online shopping and house-to-house deliveries.
However, market growth for the business has since slowed down as cities returned to normal and the prices of food and oil spiked.
Aside from Instacart, its main competitors DoorDash and Uber have started trimming down their workforce following a widescale hiring three years ago.
Several business ventures and services have also been closed down as part of cost-cutting measures.
