Instacart lays off 1,900 workers, including the 10 who formed a union

Marco Green
January 23, 2021

"Instacart has been engaging in discussions with its retail partners about various options created to support their changing needs as grocery e-commerce becomes even more integral to their businesses", the letter stated, noting that ISSs are "significantly more expensive on a cost-per-delivery basis than using a pure [full-service shopper] model".

Instacart is firing roughly 1,800 of its 10,000 in-store shoppers across the US and will offer as little as $US250 ($322) as severance pay, per a letter the UFCW shared from a labour attorney representing Instacart.

Now, Instacart is moving in the other direction, eliminating 1,877 employees' positions, including those of 10 workers in IL who past year became the first in the country to vote to unionize at the company.

"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 has more than 500,000 workers, adding almost 250,000 following the onset of COVID-19 as demand for its services increased 500%. With some grocers opting to move to the "partner pick" model, Instacart told Insider it will wind down in-store operations at some retailer locations in the coming months. It added however it had "thousands of jobs" available at its retail stores.

Instacart's employees at the Mariano's in Skokie are a rarity for the company and the gig economy broadly.

For its part, Instacart claims its employees' choice to unionize had zero influence on its layoff decisions, per a company spokesperson. The employees at Skokie became the first, and so far only, Instacart workers to vote to unionize, prompted by frustration at the company's use of algorithms to rate workers and its focus on speed.

The union this week also highlighted a recent win by its Local 5 chapter in San Francisco, securing its first union contract for delivery workers employed by Albertsons.

Instacart will lay off its only unionized workers as part of a plan to axe almost 1,900 employees stationed in supermarkets across the country. "I have a whole bunch of mixed emotions about the whole thing", the worker, who spoke on the condition of anonymity for fear of retaliation, told CNN Business. The Skokie bargaining unit was established a year ago and contract talks between Instacart and the union were in progress. "Then, it's just like okay, they're just changing the business model".

Moving forward, some Instacart partners will be transitioning to a Partner Pick model for Instacart Pickup orders. Kroger already operates a Pickup service for groceries staffed by its own employees. Instacart said it serves 3,300 pickup locations today, having added 2,000 stores past year.

Instacart works with more than 500 local, regional and national retailers to create a seamless online grocery shopping experience, and insisted in a blog post, "There isn't a one-size-fits-all solution for retailers".

Unlike the contract workers who largely receive no benefits and protections, in-store shoppers are paid an hourly wage; they're also eligible for benefits such as unemployment, social security and Medicare, and more recently they were able to accrue sick pay.

"With certain markets or retailers, including Kroger-owned stores, Instacart's current use of ISSs is significantly more expensive on a cost-per-delivery basis than using a pure FSS model", the attorney, Joseph Santucci Jr. of Stinson LLP, said in the letter. In 2015, Bloomberg reported that the company would hire some permanent part-time employees in order to improve the quality of orders by requiring training and supervision. Kroger said it played no role in Instacart's decision and would consider hiring affected Instacart shoppers for retail positions in its stores. The company, expected to go public this year, has been estimated to be worth as much as $30 billion, according to CNBC.

Kroger is just the latest example of how Instacart's relationship with grocers and its workers is evolving.

Other reports by Click Lancashire

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