Instacart announced Tuesday that it plans to cut 250 jobs, or about 7% of its workforce, to focus on “promising” initiatives.
But shares of Instacart, officially known as Maple Bear, fell about 10% in after-hours trading after the company missed fourth-quarter revenue estimates.
The grocery delivery company joins several companies in the U.S. and Canada that are laying off thousands of employees as they rush to cut costs amid an uncertain macroeconomic environment.
“These (reductions) will allow us to restructure the company and flatten our organization, and will allow us to move forward with the long-term transformation of our company and our industry,” Chief Executive Officer Fiji Simo said in a letter to shareholders. We can concentrate on our initiatives.” .
The company had a total of 3,486 employees as of June 30, 2023, according to regulatory filings.
The company also said Tuesday that it expects first-quarter total trading value and core profit to exceed analysts’ expectations.
The company also expects adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to be between $150 million and $160 million for the current quarter, compared to analysts’ expectations of $100 million, according to LSEG data. It is said to be $51.6 million.
The report predicts that gross transaction value (GTV), a key industry metric that measures the value of goods sold based on the price displayed on Instacart, will be between $8 billion and $8.2 billion. Analysts had expected sales to rise 6.1% to $7.92 billion.
The company also approved an additional $500 million share repurchase program, exceeding the $500 million announced last quarter.
Total revenue for the fourth quarter rose 6% to $803 million, below expectations of $804.2 million, indicating a slowdown in growth after the pandemic boom.
