The online grocery shopping app Instacart is firing workers who voted to form a union last year as part of a wider round of layoffs that will affect more than 1,800 in-store shoppers.
The news comes as Instacart is eyeing a possible initial public offering. Last fall, the company reportedly tapped Goldman Sachs to lead a possible offering. CNBC, citing people familiar with the matter, said the company could be valued at $30 billion. Instacart raised $200 million last year in a fundraising round that valued it at $17.7 billion.
In a statement, the United Food and Commercial Workers Union said the company should reconsider its decision to lay off essential workers during a health crisis.
“For seniors, high-risk individuals, and countless more who are quarantining, Instacart grocery workers have been a trusted and crucial lifeline, providing access to food for some of the most vulnerable Americans,” the UFCW Local 1546 said. “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.”
Instacart relies on in-store shoppers who are part-time employees of the company and work inside stores. It also uses some 500,000 contract workers who shop and deliver orders to customers.
In 2015, then-chief executive officer Apoorva Mehta said that data showed its part-time employee model produced higher quality, more efficient order-picking and improved customer experience. But in its letter, the company said in 2018 it began reducing the number of in-store shoppers it employs.
Instacart reportedly hired hundreds of thousands of workers in a span of eight weeks last spring as the COVID-19 epidemic upended the economy.
“As a result of some grocers transitioning to a partner pick model, we’ll be winding down our in-store operations at select retailer locations over the coming months,” Instacart said in a statement. “We’re doing everything we can to support in-store shoppers through this transition.”