Job cuts continue as Gopuff restructures

Dive Brief:

  • Gopuff recently held layoffs impacting its customer service team as part of the company’s restructuring effort and previously announced decision to cut its workforce by 10%, according to the company. 
  • In this latest staff reduction, Gopuff let go as many as 250 employees, according to Bloomberg.
  • Gopuff’s layoffs and restructuring come at a time when technology and rapid delivery firms are grappling with a challenging economic market.

Dive Insight:

The job cuts affected full- and temporary employees and were the most recent impact of the company’s implementation over the last three months of its restructuring plan.

“In July Gopuff announced a company-wide reorganization and 10% reduction in workforce as part of a broader restructuring effort to focus on profitability,” Gopuff said in a statement on Wednesday. “The most recent impacts to the customer service team were part of this reorganization which we’ve been implementing for the last three months.”

Gopuff turned to an outsourced customer experience network in February, which prompted the staff reductions of full-time and temporary workers, according to the company. The company said it will keep an internal team to drive strategy, identify and solve systemic problems, and handle other areas, without specifying the exact number of workers.

Gopuff said it delayed making the cuts to the customer service team for legal and operational reasons. 

When Gopuff confirmed in July its decision to reduce its workforce by 10% — about 1,500 workers — the company also disclosed plans for “closing and consolidating” 76 of its U.S. dark stores, roughly 12% of its footprint in the country. An internal “realignment” to boost the company’s financial standing spurred those actions, co-founders Rafael Ilishayev and Yakir Gola said at the time. 

In March, Gopuff said it cut 3% of its global workforce of around 15,000 employees. Efforts to “remove overhead and drive operational efficiencies” caused the spring layoff, Ilishayev and Gola said at the time. 

Gopuff said on Wednesday it offered all full-time and hourly W2 employees impacted by the cuts severance and transition support. 

While Gopuff has dominated funding in the instant delivery space last year, startups in the technology space have seen financing opportunities dry up in recent months. Couple that with shifting consumer behavior with grocery shopping amid high inflation, and Gopuff is seeing potential pathways to profitability constrict. 

This year has been marked by a number of layoffs by technology companies in food delivery and restaurant technology segments. ChowNow, an online restaurant delivery and pickup ordering platform, laid off nearly 100 employees in July. Virtual restaurant startup Nextbite cut an undisclosed number of jobs that same month, and ghost kitchen company Reef trimmed its workforce by 5% in May. 

In July, ChowNow CEO Chris Webb said he expects more restaurant technology companies to make staff reductions to protect profitability in the face of an expected economic downturn. 

“We’re working on the assumption that [the peak of private capital investment] has gone away. And it’s not there. And we want to be in a position — and we now are because of the [layoffs] — to survive many, many years should that capital not come back,” Webb said.


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