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Instacart to cut 1,900 jobs, including its only unionized workers

Instacart shopper Yelitza Esteva, right, bags groceries for an order at a grocery store in Surfside, Fla., in April.
Instacart shopper Yelitza Esteva bags groceries for an order at a grocery store in Surfside, Fla., in April.
(Wilfredo Lee / Associated Press)

Instacart Inc. is cutting about 1,900 employees’ jobs, including 10 workers who recently formed a union, as the company seeks to boost its ranks of contract workers.

The grocery delivery company already classifies most of its workers as independent contractors, whose numbers have ballooned to more than 500,000 during the COVID-19 pandemic. But starting in 2015, the company hired a small subset of workers as employees, who under U.S. law are entitled to protections such as a minimum wage and can be subject to more direction and training by their bosses.

“What we found is that our shoppers require training and supervision, which is how you improve the quality of the picking,” Instacart Chief Executive Apoorva Mehta said at the time. “You can’t do that when they are independent contractors.”

Demand for Instacart’s grocery deliveries has put new strains on the company’s shoppers, who say they have little to show for risking their health.

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Now, Instacart is moving in the other direction, eliminating 1,877 employees’ positions, including those of 10 workers in Illinois who last year became the first in the country to vote to unionize at the company. The company said it’s doing this as part of a shift toward new models, such as providing its technology to retailers to have their own workers prepare customers’ orders.

“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,” the company said in an emailed statement.

Instacart said it’s providing severance packages and seeking to place affected workers in open positions within the company or working directly for retailers. Instacart said it will still have thousands of shoppers classified as employees after making the change but declined to provide more specifics.

The United Food & Commercial Workers union, which represents the Illinois workers, condemned the move, saying it eliminates about a fifth or more of Instacart’s U.S. frontline employee positions. “Instacart firing the only unionized workers at the company and destroying the jobs of nearly 2,000 dedicated frontline workers in the middle of this public health crisis is simply wrong,” Marc Perrone, the union’s president, wrote in an emailed statement.

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Instacart shoppers with higher ratings get first pick of orders. Those with lower ratings earn less, even when the ratings aren’t fair, shoppers say.

San Francisco-based Instacart and other gig companies including Uber Technologies Inc. and Lyft Inc. last year bankrolled a successful $200-million campaign to pass a California ballot measure, Proposition 22, exempting them from a state law that classifies workers as employees if they do work in the “usual course” of their bosses’ business. Emboldened by that victory, the companies are pushing for similar changes elsewhere that would make it easier to claim that their workers are contractors.


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