Delivery service Gopuff has laid off hundreds of employees as it aims to cut costs, the company confirmed today. Former employees claimed the number was more than 1,000.
The job cuts appear to have come from a wide range of teams and office locations, with one ex-employee noting on LinkedIn that the “downsize impacted most areas within HQ.” Individuals who have posted on the social networking site about their own layoffs include Gopuff team members in HR, recruiting, accounting and finance, program management, events, Gopuff Kitchens and engineering.
“I got laid off today… Along with 1,000+ other folks from Gopuff across all orgs,” a former employee posted on LinkedIn. “I feel strange, sad, upset, but hopeful! I worked alongside amazing folks, and essentially earned my MBA by showing up everyday.”
News of the potential firings broke earlier this week when The Information reported that the delivery service planned to cut 3% of its 15,000 workforce worldwide in order to save roughly $40 million. Earlier this year, Gopuff reportedly underwent a much smaller round of job cuts.
Asked to comment on today’s personnel cuts, a Gopuff spokesperson directed NOSH to a Bloomberg article that reported employees were sent a memo this morning attributing these changes to its “new global business model and corresponding investment priorities.”
Bloomberg also reported that Gopuff is close to solidifying a $1 billion convertible note led by investment firm Guggenheim Partners. Though the publication had previously said GoPuff was considering an initial public offering (IPO) later this year, that now appears to be off the table due to the market’s downward trend.
Headquartered in Philadelphia, Gopuff was founded in 2013 as a rapid (30 minutes or less) delivery service for items typically sold in a convenience store, but has since expanded its assortment to include a wide array of food, beverage, personal care items and alcoholic beverages. The company’s micro-fulfillment centers span four countries and 1,200 cities. By controlling its own distribution and inventory, rather than picking from other store shelves, GoPuff claimed it was able to offer its customers faster, more convenient delivery options at lower prices compared to rivals Amazon and Instacart.
In January, citing the opportunity to increase margins on products sold, the company announced it would roll out its first private label line under the “Basically” brand. Starting with water and snacks, over the year, Gopuff said it planned to add more categories.
In the years since its launch, Gopuff has faced increased competition from Instacart and Amazon, which have each integrated on-demand rapid delivery options into their respective platforms. Food delivery platforms Uber Eats and Doordash also now have their own grocery delivery services, with the latter’s recent launch of Dashmart presenting itself as a seemingly direct competitor to Gopuff.
On top of increased competition, delivery services are struggling to maintain the higher revenue numbers they achieved during the COVID-19 pandemic. According to a November 2021 survey conducted by supply chain software company Blue Yonder, 7% of consumers reported using grocery delivery services, down from 14% in October 2020.
Other rapid delivery companies have faced their own financial difficulties. Earlier this month, Fridge No More and Buyk each halted operations. While Fridge No More’s issues reportedly stemmed from increased competition, Buyk declared bankruptcy as a result of financial issues tied to funding originating in Russia.