Instacart To Cut 250 Jobs As Slowing Ad Business Counters Upbeat Q1 Forecast

By Reuters
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Instacart To Cut 250 Jobs As Slowing Ad Business Counters Upbeat Q1 Forecast

Instacart has forecast its first-quarter gross transaction value (GTV) and core profit above estimates due to an uptick in grocery orders, and said it plans to cut 250 jobs, or 7% of its workforce, to focus on 'promising' initiatives.

Instacart announced lower-than-expected fourth-quarter revenue on slowing advertisement business.

As of 30 June 2023, Instacart had 3,486 employees, according to a regulatory filing.

"We are seeing (some weakness among advertisers) in pockets, but it is not widespread," said CEO Fidji Simo on a post-earnings call.

Ad and other revenues increased 7% in the fourth quarter, compared with a 19% growth in the previous quarter.


"Advertising business has slowed down," CFRA Research's Arun Sundaram said, adding that this would cause a bit of concern because it was historically a very fast growing and high-margin business for the company.

Total revenue rose 6% to $803 million (€747.79 million), falling short of analysts' expectations of $804.2 million (€749.65 million).

Incentives And Promotions

Transaction revenue growth slowed sequentially to 6%, as Instacart offered more incentives and promotions to attract customers, especially during the holiday season, amid stiff competition from rivals such as DoorDash, UberEats, and Walmart.

Total orders rose 5% to 70.1 million in the reported quarter as the grocery-delivery company also saw growth among its newer customer base.


The company expects current-quarter GTV - a key industry metric that shows the value of products sold based on prices shown on Instacart – to range between $8 billion and $8.2 billion (€7.44 billion to €7.64 billion), compared with analysts' estimates of $7.92 billion (€7.36 billion).

It sees adjusted EBITDA between $150 million and $160 million (€139.5 million to €148.8 million), compared with analysts' estimates of $151.6 million (€141.03 million), according to LSEG data.

The firm said it authorised an additional $500 million (€465 million) share repurchase programme and expects to generate positive operating cash flow this year.

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