Startups

Gopuff is laying off 10% of its workforce in second major round of layoffs of 2022

While the Philly company raised billions last year ahead of a suspected IPO, it's since laid off thousands of employees to focus on profitability ahead of an economic downturn.

Gopuff delivery.

(Courtesy photo)

In an attempt to reduce spending amid an economic downturn, instant needs unicorn Gopuff is laying off 10% of its workforce this week. It’s the second round of major layoffs for the Philly company in the past four months.

Less than four months ago in March, the Callowhill-headquartered company laid off 3% of its staff of “more than 15,000 people.” In January, it also reportedly laid off about 100 people. This latest announcement is set to impact about 1,500 US employees, a Gopuff spokesperson confirmed to Technical.ly on Tuesday morning.

The spokesperson also confirmed that the affected employees are a mix of corporate workers and warehouse employees. The move comes as the company is also slated to close 76 of its US warehouses, which is about 12% of its footprint. The move will consolidate warehouses in some areas or cities.

In a memo to investors, shared with Technical.ly by a spokesperson, cofounders and co-CEOs Rafael Ilishayev and Yakir Gola wrote that the instant needs industry in which the company operates is at an “inflection point.” As Gopuff prepares for a period of economic downturn, it aims to focus on profitability, they said.

“We built this company focusing on profitability first and were profitable for the first three years. This was only possible because we operated with a ‘nail it before scaling’ approach, a cultural discipline that positioned us for long-term success and sustainability,” they wrote to investors. “We are fortunate to have, by far, the strongest balance sheet in this industry, with a four-year cash runway, free cash flow coming from our scaled markets and leading category share.”

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The company slowed its plans to go public last year, after raising more than $3.5 billion in 2021. It’s also scooped up a number of smaller, international companies in the same industry via acquisition, expanded to Europe, and set up thousands of micro-fulfillment centers across the US.

Ilishayev told Yahoo Finance last month that the company has $2 billion in cash in the bank, allowing the company a lot of flexibility. He spoke with reporter Julie Hyman about the company’s position awaiting a public offering amid a changing VC landscape.

“We’ve never needed investors,” he said then. “We’ve positioned the business to have maximum amount of flexibility, and as a by-product of that, we’re prepared for what’s to come.”

In the memo to investors, Ilishayev and Gola said they were making a handful of business updates to “solidify Gopuff’s future success.” They include optimizing the company’s fulfillment center footprint, focusing on its core business of instant needs delivery, and investing in its revenue-generating initiatives like commerce integrations and the tech behind Gopuff Ads. Plans also include prioritizing its international investments and “improving operational efficiencies” — specifically, laying off 10% of its workforce.

“We will be informing impacted employees throughout the day today,” the cofounders wrote. “While difficult, this restructures us to align more closely around business priorities while accelerating our path to profitability.”

Early reports on social media and LinkedIn show the affected roles run from talent acquisition to tech teams.

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This is a developing story and may be updated. If you have insight into Gopuff’s moves or want to share your expert opinion, please email us at philly@technical.ly. 

Companies: Gopuff
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