Delivery Firm Gopuff Cuts 1,500, Closes Warehouses

Gopuff will be cutting 10% of its global workforce, along with shutting down dozens of warehouses, according to Bloomberg Tuesday (July 12).

The delivery company is responding to signs that it expanded too fast over the course of the last few years of the pandemic. The cuts will affect around 1,500 staff members and will hit both corporate and warehouse jobs, according to a memo.

The report said Gopuff plans to shut down 76 warehouses, which cuts down to 12% of its network across the U.S., helping it consolidate its footprint in various cities. This shows how Gopuff is reversing itself, as it has previously been expanding at “breakneck speed.”

This is also the second time in the past four months that the company has cut positions — Gopuff also slashed 3% of jobs in March. At that time, it also cut its plans to go public.

The company was valued at $15 billion last July and had generated just below $2 billion in revenue last year. Order volume sprang up 70% compared to 2020 at that point. However, there have been some costs — such as Gopuff continuing to establish new warehouses, with the new locations costing around $250,000 a piece to launch.

The report noted that the streamlining of expenses has come with an “acknowledgement” that the company had been expanding too much and too quickly.

PYMNTS wrote that there has been a change in the way the grocery boom has been going — despite a drop in the 10- and 15-minute grocery delivery services, things have been shifting.

See more: The Quick Seems Dead as Ultrafast Grocers Retreat En Masse

As of July 4, the reports say that some companies are changing things, including Berlin’s “ultrafast” Gorillas company pulling out of Italy. That came after its departure from Belgium in June. Other activity includes Buyk, an ultrafast grocer, filing for bankruptcy as of June, as it planned to shut things down and get rid of inventory. Also, Fridge No More, the ultrafast grocer, had plans to close after its talks with DoorDash didn’t come to fruition.

Read also: Gopuff Expands BurgerFi Partnership to Take on Restaurant Aggregators