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Instacart is eliminating nearly 2,000 jobs

Megan Rose Dickey
·3 min read
DENVER, CO. OCTOBER 28: Kaitlin Myers a shopper for Instacart studies her smart phone as she shops for a customer at Whole Foods in Denver. Myers receives a grocery list for a shopper and then completes the shopping on Tuesday, October 28, 2014. (Denver Post Photo by Cyrus McCrimmon)

Instacart plans to lay off nearly 2,000 of its workers, including the 10 workers from the Kroger-owned Mariano's who unionized early last year, Vice reports. These workers are responsible for in-store shopping and packing of groceries.

According to Vice, 10 of the workers affected unionized with the United Food and Commercial Workers Local 1546 in Skokie, Illinois. However, they have yet to negotiate a contract with Instacart, according to Vice. Instacart notified the union of the planned changes earlier this week. In the letter, Instacart said it planned to stop using in-store shoppers at Kroger-owned stores, which includes the Mariano's store in Skokie, in Q1 and Q2 of this year, but no earlier than mid-March.

Currently, Instacart says it's working to place the impacted employees with jobs at retailers or place them at other grocery stores that still rely on Instacart shoppers. In total, Instacart said about 1,800 employees will be affected by these changes. Those laid off will receive separation packages, according to Instacart. But according to UFCW, Instacart will provide between $250 to $750 to the workers they let go.

Instacart referenced the potential layoffs in a blog post earlier this week in a post about new pickup retailer model. In it, Instacart said it would wind down some of its in-store operations at some retail locations to switch to what it's calling Partner Pick. Through Partner Pick, instead of relying on Instacart shoppers to pick and pack groceries, retailers will rely on their own workforces with the help of Instacart's technology.

"As a result of some grocers transitioning to a Partner Pick model, we’ll be winding down our in-store operations at select retailer locations over the coming months," an Instacart spokesperson said in a statement to TechCrunch. "We know this is an incredibly challenging time for many as we move through the COVID-19 crisis, and we’re doing everything we can to support in-store shoppers through this transition. This includes transferring impacted shoppers to other retailer locations where we have Instacart in-store shopper roles open, working closely with our retail partners to hire impacted shoppers for roles they’re looking to fill and providing shoppers with transition assistance as they explore new work opportunities. We’re also providing all impacted shoppers with separation packages based on their tenure with Instacart."

This all comes as Instacart is gearing up to go public. In November, Reuters reported Instacart picked Goldman Sachs to lead its IPO at a $30 billion valuation. That would be a big jump from the $17.7 post-money valuation Instacart secured in October with a new $200 million funding round.

In a statement, UFCW International president Marc Perrone called these workers a lifeline during the COVID-19 pandemic and called on Instacart to stop these plans to fire them.

"Instacart firing the only unionized workers at the company and destroying the jobs of nearly 2,000 dedicated frontline workers in the middle of this public health crisis, is simply wrong," he said. "As the union for Instacart grocery workers in the Chicago area and grocery workers nationwide, UFCW is calling on Instacart to immediately halt these plans and to put the health of their customers first by protecting the jobs of these brave essential workers at a time when our communities need them most."