Instacart is firing 10 employees who voted to form the first and only union on the grocery delivery platform at a Mariano's grocery store in Skokie, Illinois, and inspired other Instacart employees to organize their coworkers at grocery stores around the country.
The decision to terminate the employees who unionized with the United Food and Commercial Workers Local 1546 in Skokie in early 2020 is part of a larger series of layoffs that Instacart announced on Tuesday. The news was buried in a blog post and the layoffs impact Instacart's in-store shoppers, who are direct employees of the company that pick and pack groceries at supermarkets around the country. According to the UFCW, Instacart is firing nearly 2,000 of its 10,000 grocery grocery store workers as part of these layoffs, and offering as little as $250 as severance.
The layoffs come amid Instacart's rapid expansion during the Coronavirus pandemic as millions of people have turned to on-demand grocery delivery. The company reported profitability for the first time in 2020, is preparing to IPO at some point this year, and is estimated to be valued at up to $30 billion, CNBC reported.
The decision to terminate the workers who voted to unionize last February and were in the process of negotiating their first contract could put a damper on other efforts to unionize Instacart's in-store shoppers around the country. At the time of their union drive in 2020, Instacart manager ran a union-busting campaign, circulating anti-union literature and memos intended to convince workers to vote down the union.
"These layoffs are totally discouraging for any gig workers who are trying to do something to make these jobs better," a unionized Instacart in-store shopper in Skokie said. Motherboard granted the worker anonymity because they feared retaliation from Instacart.
The worker said they hoped to secure health insurance and vacation time in their first contract, and hoped to set a higher standard for working conditions that could improve the lives of gig workers around the country. In-store shoppers also want a say in the algorithm that determines their schedules and the pace of work. According to the worker, the union learned about the layoffs
"Anger is the first thing I feel because they eliminated my job during a pandemic and the reason they gave us is 'cost-cutting,'" the worker continued. "The second thing I feel is fear. Am I going to be lucky enough to get another job? I had a business that was closed for being non-essential and I didn't have enough money to keep it going and open it back up. From a financial standpoint, I lost everything. With this job, while it doesn't pay super well, I could at least pay for my cell phone and car insurance and buy groceries."
News of the layoffs, which will impact Instacart's in-store shoppers at several supermarket chains, including Kroger-owned grocery stores, was buried in a blog post published Tuesday that Instacart wrote announcing two new curbside grocery pickup models that it intends to expand as COVID-19 has shifted the needs of customers. In July, Instacart laid off its employees at Aldi and Sprouts grocery stores, some who were offered jobs to continue working as employees of the grocery store.
"We know this is an incredibly challenging time for many as we move through the COVID-19 crisis, and we’re doing everything we can to support in-store shoppers through this transition," a spokesperson for Instacart told Motherboard.
A spokesperson for Kroger told Motherboard, “The Kroger family of companies was not involved in Instacart’s decision to suspend its in-store operations model. For those who are looking for a career opportunity, we have thousands of retail roles available on jobs.kroger.com.”
Instacart did not respond to a question about how many workers would be terminated, but has said that it will help laid off workers transition into new roles at other grocery stores—or into gig worker positions at Instacart, and provide severance packages to all laid off workers depending on their tenure. By laying off in-store shoppers who are employees who are eligible to unionize and transitioning them into non-union eligible gig workers roles, Instacart is also making it more difficult for its workforce to unionize.
Over the past year, UFCW organizers have organized Instacart in-store shoppers around the country, though the workers at the Mariano's in Skokie remain the only group to have unionized. In May 2020, Instacart employees at a grocery store in Chicago voted down a union.
“Instacart firing the only unionized workers at the company and destroying the jobs of nearly 2,000 dedicated frontline workers in the middle of this public health crisis, is simply wrong,” said Marc Perrone, president of UFCW International, in a statement. "As the union for Instacart grocery workers in the Chicago area and grocery workers nationwide, UFCW is calling on Instacart to immediately halt these plans.”
This article has been updated with details about the layoffs and a statement from UFCW International President Marc Perrone and a Kroger spokesperson.