Gopuff, the rapid-delivery startup based in Philadelphia, has announced the layoff of over 100 employees in its operations department, which accounts for about 2% of its global workforce. The job cuts come as part of the company’s effort to reduce costs and return to profitability after years of expansion, according to co-founder Rafael Ilishayev.
This is the latest in a series of layoffs at the company, which have affected hundreds of employees over the past year. In addition to downsizing measures, Gopuff has also abandoned plans to open new warehouses and expand its footprint due to unfavorable market conditions. Despite the job cuts, Ilishayev stated that the company will continue to open fulfillment centers in key locations and add new items to its inventory. As of September 2022, Gopuff had 10,000 employees and was valued at $15 billion.
Gopuff’s recent layoffs come as the company faces increasing competition in the rapidly growing delivery market. The company’s main rivals include Uber Eats, DoorDash, and Instacart, all of which have made significant investments in recent years to expand their services and customer base. In response, Gopuff has been exploring new ways to diversify its business and attract new customers, such as expanding its product offerings beyond convenience store items and partnering with other retailers to offer same-day delivery.
However, the company’s rapid expansion and high valuation have also led to concerns among some investors and analysts. Gopuff’s business model relies on a low-margin, high-volume approach to delivery, which can make it difficult to achieve profitability over the long term. In addition, the company has faced criticism for its treatment of workers, including reports of poor working conditions, low wages, and high turnover rates.
Despite these challenges, Gopuff remains one of the fastest-growing companies in the delivery market, with a presence in more than 650 cities across the United States, Europe, and the United Kingdom. The company has also continued to raise significant amounts of capital, including a $1 billion funding round in June 2021 led by investors such as Fidelity and Blackstone. However, as the company looks to balance growth with profitability, it remains to be seen whether Gopuff will be able to maintain its position as a leader in the delivery space.