Grocery pickup and delivery company Instacart will cut nearly 1,900 employees from its workforce, including all 10 of its unionized workers.
The move comes in spite of the boon that the coronavirus has been to services like those offered by Instacart. Concerns of infection in high-traffic locations such as groceries have pushed more people than ever to Instacart — leading the company to hire 300,000 workers in a single month to accommodate demand, according to CNN.
However, Instacart considers those jobs to be independent contractors, whose ranks in the company have now swollen to more than 500,000, according to Bloomberg. Unlike employees, independent contractors are not entitled to protections such as a minimum wage. Instacart began hiring more employees in 2015 in order to provide better training and direction.
“What we found is that our shoppers require training and supervision, which is how you improve the quality of the picking,” Instacart chief Apoorva Mehta said at the time.
In a blog post on Medium, Instacart said it would be “winding down our in-store operations at select retailer locations over the coming months” in order to pursue new pickup options.
“One of the ways we’ve seen grocers step up to meet the surge in customer demand is through the growth of curbside pickup services like Instacart Pickup,” the post read.
The United Food & Commercial Workers union, which represented the Illinois workers, called the move “simply wrong,” noting that the layoffs affected roughly one-fifth of Instacart’s front-line employees.
“Instacart firing the only unionized workers at the company and destroying the jobs of nearly 2,000 dedicated front-line workers in the middle of this public health crisis is simply wrong,” Marc Perrone, the union’s president, told Bloomberg.
Instacart launched its pickup services at more than 2,000 new locations in 2020, serving as an alternative to its traditional model of in-store shoppers buying groceries and then delivering them to customer’s homes. It now has operations in more than 3,300 stores across the country, working with 60 grocery partners.
“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,” the blog read. “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.”
The coronavirus pandemic saw Instacart notch its first monthly profits ever, surging from losing roughly $25 million every month in 2019 to a $10 million profit in April 2020, putting the company on track to process more than $35 billion in grocery sales.
