Is Gopuff running low on gas? Or just cutting costs to sell its stock to the public?
The Philadelphia-based home-delivery service plans “hundreds of layoffs” to cut tens of millions in costs, The Information, a tech industry publication, reported Tuesday.
The report added that the company has been facing management turnover even as it prepares for an initial public stock offering that could enrich its founders, investors, and top executives. Business Insider also reported in January that Gopuff was cutting jobs.
In Philadelphia, the company “started layoffs to my knowledge about two months ago,” eliminating district managers who formerly oversaw groups of stores, said Candace Hinson, a Gopuff driver in Philadelphia who has been active in efforts to organize drivers for better working conditions.
In January, Gopuff hired Morgan Stanley and Goldman Sachs Group to prepare a plan to sell shares to the public.
There’s a lot at stake: Gopuff has raised more than $3 billion from investors include Japan’s Softbank, the Blackstone and Guggenheim private-equity groups, and Fidelity Management and Research Co., among others.
Fueled by investors, the company, which delivers food, beverages and convenience store items to customers’ homes, has grown rapidly across the globe with hundreds of fulfillment centers and stores in the United States and Europe.
But this year, many factors — including a volatile stock market, neighborhood stores reopening from the pandemic, and relentless competition from the likes of Amazon, Uber Eats, and DoorDash — have pressured the industry. Two New York-based food-delivery services, Buyk and Fridge No More, shut down earlier this month.
Gopuff has specialized in convenience-store products and branched out into beer and brand-name snacks.
Gopuff, which has more than 15,000 employees worldwide, plus thousands of contracted drivers, is currently advertising for a long list of worker jobs based at its neighborhood warehouses in the Philadelphia area — but lists just one position at its headquarters at Third and Spring Garden Streets. It is for a human-resources senior manager.
Most management and technology jobs are now listed as “Remote,” raising the question of whether Gopuff, like other Philadelphia office employers, will scale down its headquarters as more staff work from home. Spokespeople for the company did not immediately respond to inquiries on Wednesday.
Like other entry-level employers, Gopuff has had a tough time filling many positions.
Gopuff says it pays minimum wages to contracted drivers during “periods of low demand.” According to the company, three-quarters of drivers earn more than the minimum. Including a bag fee of at least $2.25 per order, the “average” driver collects “between $18-$25 an hour,” plus tips, the company said.
On March 2, Gopuff said it would offer discounts, including “at least 35 cents per gallon cash back discounts,” for gasoline “on their next two fill-ups,” and 10% cash back” on their next two restaurant or grocery purchases. It also offered car-repair discounts of “up to 25% off” prices at Pep Boys and certain other car repair chains.
The strain of a Gopuff delivery job in its own home city includes street violence, said Ronald Moody, a former Gopuff driver who remains active in organizing efforts to advocate for higher pay and better working conditions.
He noted one especially ugly example, a Feb. 11 shooting in the 900 block of South Fifth Street, near the company’s South Philadelphia warehouse that left a Gopuff driver in critical condition. He said he was aware of other episodes.
“They are attacked while they are waiting for bags to be delivered” to them to take to customers, Moody said.
He said wait times are longer and drivers are more vulnerable when the company can’t find enough warehouse workers, and orders back up.
Philadelphia police confirmed the February shooting, but said they had no additional information.