January 23rd, 2021. Instacart, the grocery-focused ecommerce operations business, is laying off 1,877 employees who pick online orders from some of its partner grocery stores. The move is planned for March 2021. In a letter from Joseph Stantucci Jr. partner at lawyers Stinson LLP, Instacart has explained this is due to some grocery stores moving to a "Partner Pick" model, where the store's employees pick the products for collection orders placed on the Instacart website and App.
While the majority of Instacart's 500,000 pickers, called Full Service Shoppers (FSS), are classified as independent contractors, it does have some employees working at specific grocery chain locations as In-Store Shoppers (ISS), including some of those for Kroger and Kroger-subsidiary Mariano's in Skokie, IL, a 20 minute drive from Willis Tower in downtown Chicago.
The letter goes on to explain that ISS are more expensive than FSS on a per-delivery basis and a greater ability to flex the resources according to demand. Instacart therefore "plans to end the use of ISSs at all Kroger-owned stores nationwide". This impacts the 366 ISS at Kroger stores and a further 1,511 at other grocery chains. Instacart plans to "offer separation packages between $250 and $750 based on the ISS's years of service".
The letter is addressed to Jonathan Willigman at the United Food and Commercial Workers International Union (UFCW) who represents the workers at the Mariano's location.
This move is not unusual for Instacart, as it has continued to reduce reliance on ISS since 2018. Instacart is a member of our ecommerce platform shortlist.