Instacart Plans to Lay Off 2,000 Workers This Month

Grocery shopping and delivery service Instacart announced on January 22 that it is going to lay off about 2,000 of its workers. This includes 10 workers who recently joined the United Food and Commercial Workers Local Union 1546 in Skokie, IL. Instacart says that the workers who will be laid off are those who take on gig work related to in-store shopping and packing grocery orders.

About the Union Workers Who Will Lose Jobs

The 10 unionized workers did not yet negotiate a contract with Instacart. That makes it easier for Instacart to lay them off. The firm did notify the union that it plans to make changes to its business model and that it will no longer need the services of those 10 employees who recently joined the union.

Instacart Changes Its Business Model

In its January 22 statement to the press, Instacart explained that it is going to stop using in-store shoppers at Kroger stores and affiliated stores that are part of the Kroger umbrella. That includes the 10 unionized workers at the Mariano's store in Skokie. The layoffs will begin in quarters one and two of 2021, and they will be finalized by late March or early April.

What Instacart Plans to Offer the Laid-off Workers

Instacart says that it will try to place the impacted gig workers at jobs with nearby retailers or in other grocery stores where Instacart will still do business. In all, Instacart will be eliminating 1,800 workers. The people who get laid off will be eligible to receive separation packages. The United Food and Commercial Workers Local 1546 stated that the proposed separation packages are woefully inadequate. The packages will only be a $250 to $750 severance check. For the affected workers, that's less than one week to about two weeks of the wages they would typically earn.

Instacart Defends Its Actions

Instacart gave a hint of these layoffs in a blog post that it made earlier this week. The blog post discussed a new model for retailer pickups. Instacart stated that it would be reducing its in-store operations in order to switch to what it calls a Partner Pick service. The Partner Pick service will allow retailers to use their own employees to shop for the items and pack the orders. The retailers will get to use Instacart's technology to prepare the orders for curbside pickups or deliveries to customers' homes.

Statement From Instacart Leadership

Instacart's spokesperson stated that some grocery retailers are transitioning to the company's new Partner Pick option. As a result, Instacart will curtail its in-person shopping and packing services at all Kroger stores and affiliates in the United States. Instacart says that it knows the COVID-19 crisis is hitting a lot of people and workers hard. The spokesperson added that the company is trying to transfer the impacted workers to other retail locations where they can do the same work. They are also working with the Kroger stores and affiliates to get them to hire the Instacart gig workers who are being laid off. Doing so would help the Kroger stores and affiliates because the in-store shoppers already know the store layouts. The spokesperson went on to say that each separated employee's severance package would be commensurate with the amount of time they have worked for Instacart.

Instacart Has More Changes in Store

This is happening as Instacart prepares to become a public company. In November 2020, the business selected Goldman Sachs to coordinate its IPO. Its IPO has an estimated $30 billion value. That would be a huge increase from the $17.7 billion that Instacart had in October of last year.

What the United Food and Commercial Workers Union Has to Say About the Layoffs

The United Food and Commercial Workers International Union President, Marc Perrone, said that these workers were deemed essential during the COVID-19 pandemic. He said it was an insult for Instacart to fire them. According to Perrone, Instacart's firing of the unionized workers and the other employees destroys the livelihoods of almost 2,000 people. Those people have worked hard and put their lives at risk during the entire COVID-19 pandemic. The union is calling for Instacart to immediately change its plans and to put their customers and employees first at a time when these services are key to the health and safety of the communities they serve.

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