Gopuff will cut 10% of its global workforce and close dozens of warehouses, according to Bloomberg on Tuesday (July 12).
The delivery company is reacting to signs that it has grown too quickly in recent years of the pandemic. The cuts will affect around 1,500 staff and affect both company and warehouse jobs, according to a memo.
The report said Gopuff plans to close 76 warehouses, reducing its network across the United States to 12%, helping it consolidate its footprint in various cities. This shows how Gopuff is reversing, as he had previously grown at “dizzying speed”.
It is also the second time in the past four months that the company has cut positions – Gopuff also cut 3% of jobs in March. Around this time, he also scaled back his IPO plans.
The company was valued at $15 billion last July and generated just under $2 billion in revenue last year. Order volume was up 70% from 2020 at that time. However, there have been costs, as Gopuff continues to establish new warehouses, with new locations costing around $250,000 apiece to cast.
The report notes that the rationalization of expenses has been accompanied by a “recognition” that the company has grown too much and too quickly.
PYMNTS wrote that there has been a shift in the way the grocery boom is unfolding – despite a drop in 10- and 15-minute grocery delivery services, things have changed.
See more: The fast seems dead as ultra-fast grocers pull out en masse
Since July 4, reports indicate that some companies are changing things up, including Berlin-based “super-fast” Gorillas pulling out of Italy. This happened after he left Belgium in June. Among other businesses, Buyk, a super-fast grocer, filed for bankruptcy in June as it planned to shut down and shed inventory. Also, Fridge No More, the super-fast grocer, was planning to close after talks with DoorDash fell through.
Also read: Gopuff expands partnership with BurgerFi to tackle restaurant aggregators