Grocery delivery service Instacart is laying off nearly 2,000 employees in the coming months as it shifts away from having shoppers embedded in stores.
Instacart unveiled the shift to a new “Partner Pick” model in a post on Medium. Under that model, Instacart will rely more on grocery store employees to fulfill orders. The announcement didn’t say how many in-store shoppers are being laid off, but CBS News reported that 1,877 Instacart employees who work embedded in grocery stores across the country will lose their jobs by March.
Going forward, grocery store employees will play a larger role in preparing pickup orders that customers place through the Instacart app. The result is that the current in-store Instacart employees will no longer be needed at many locations.
What Do the Instacart Layoffs and Changing Services Mean for Your Side Gig?
The March 2021 wave of layoffs is primarily focused on one of the two major side gigs Instacart offers: in-store shoppers. The other major side gig, full-service shopping, is indirectly affected.
In-store shoppers are W-2 employees of Instacart, and they work embedded in partner grocery stores around the country. Typically, they shop and prepare orders for pickup — either by a customer or an Instacart delivery driver who then takes the order directly to the customer’s doorstep.
As of March 2020, Supermarket News reported the company employs about 12,000 in-store shoppers. The layoffs mark an estimated 15% reduction in these types of jobs.
“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,” Instacart said in an emailed statement to The Penny Hoarder. “We’re also providing all impacted shoppers with separation packages based on their tenure with Instacart.”
Instacart did not clarify whether it plans to cut more in-store shopper positions in the future as the company continues to implement its new Partner Pick model.
The cuts have a rippling effect on the more popular grocery-delivery gigs, known as full-service shoppers. These positions are 1099 independently contracted roles. The folks who work these app-based gigs are not employees of Instacart, technically speaking. The “full-service” part generally refers to the grocery shopping and delivery responsibilities.
1099 independent contractors aren’t eligible for standard W-2 employee benefits or workplace protections, including health insurance, workers compensation, paid time off and more.
Throughout the pandemic, hundreds of thousands of people have supplemented their income with Instacart’s flexible delivery gigs.
Soon, full-service gig workers will start taking over the new shopping-only orders that will become available on the Instacart worker app.
“As part of this pilot, full-service shoppers at select retailer locations will be able to choose orders to pick, pack and stage — no delivery required,” Instacart said in an announcement.
The company did not share when the new type of orders will go into effect for gig workers.
In an announcement following the news of the Instacart layoffs, Kroger — a grocery chain that partners with Instacart — said it had no part in the decision to cut the in-store shoppers working at its locations. The grocer welcomed affected shoppers to apply to a host of job openings.
In a statement to CBS, Kroger said: “For those who are looking for a career opportunity, we have thousands of retail roles available on jobs.kroger.com.”
Adam Hardy is a staff writer at The Penny Hoarder. He covers the gig economy, remote work and other unique ways to make money. Read his latest articles here, or say hi on Twitter @hardyjournalism.