(Reuters) -Instacart forecast on Tuesday its first-quarter gross transaction value and core profit above analysts’ estimates, and said it plans to cut 250 jobs, or about 7% of its workforce, to focus on “promising” initiatives.
However, shares of Instacart, formally known as Maplebear, were down about 10% in extended trading after the company missed fourth-quarter revenue estimates.
Grocery-delivery firm Instacart joins several U.S. and Canadian firms that have been laying off thousands of employees as they scramble to reduce costs amid an uncertain macroeconomic environment.
“This (job cuts) will allow us to reshape the company and flatten the organization so we can focus on our most promising initiatives that we believe will transform our company and industry over the long term,” CEO Fidji Simo said in a letter to shareholders.
As of June 30, 2023, the company had a total employee count of 3,486, according to a regulatory filing.
The company said on Tuesday it expects current-quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) between $150 million and $160 million, compared with analysts’ estimates of $151.6 million, according to LSEG data.
It forecast gross transaction value (GTV) – a key industry metric that shows the value of products sold based on prices shown on Instacart – between $8 billion and $8.2 billion, compared with analysts’ estimates of 6.1% growth to $7.92 billion.
The company also authorized an additional $500 million share repurchase program, over and above the $500 million it announced last quarter.
Its fourth-quarter total revenue rose 6% to $803 million, falling short of expectations of $804.2 million indicating a slowing growth after a pandemic-driven boom.
(Reporting by Granth Vanaik in Bengaluru; Editing by Shinjini Ganguli)
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