Grocery-Delivery Firm Instacart Predicts Strong Q1, Plans Job Cuts
Instacart Reports Strong Q1 Forecast and Job Cuts
Instacart, the grocery-delivery firm, announced its first-quarter gross transaction value and core profit, exceeding analysts’ estimates on Tuesday. In a surprising move, the company revealed plans to cut 250 jobs, representing approximately 7% of its workforce, to prioritize “promising” initiatives.
Share Prices Dip Despite Positive Forecast
Despite the positive forecast, shares of Instacart (NASDAQ:), also known as Maplebear, experienced a 10% decline in extended trading following the company’s failure to meet fourth-quarter revenue expectations.
Industry-Wide Layoffs Amid Economic Uncertainty
Instacart joins numerous U.S. and Canadian firms in the grocery sector that have been forced to lay off employees as they strive to minimize costs amidst an unpredictable macroeconomic environment.
Reshaping the Company’s Focus
CEO Fidji Simo emphasized that the job cuts are aimed at reshaping the organization to concentrate on the most promising initiatives that the company believes will revolutionize the industry over the long term. As of June 30, 2023, the company had a total employee count of 3,486, according to a regulatory filing.
Optimistic Q1 Projections
The company projects an adjusted EBITDA between $150 million and $160 million for the current quarter, surpassing analysts’ estimates. Additionally, it expects a gross transaction value between $8 billion and $8.2 billion, demonstrating growth potential.
Strategic Financial Moves
Instacart has also authorized an additional $500 million share repurchase program, supplementing the $500 million announced last quarter. However, its fourth-quarter total revenue of $803 million fell short of expectations, indicating a tapering growth post the pandemic-driven surge.
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