Dive Brief:

• FreshDirect plans to restructure its corporate division and is laying off more than 100 workers as part of that process, a spokesperson for the company confirmed via email.
• The New York City-based e-grocer plans to eliminate 3.5% of its workforce, per the email. FreshDirect employs over 3,000 people at its headquarters in the Bronx. 
• “This corporate restructuring is a necessary step to position FreshDirect for long-term sustainability and success. We understand the impact this has on those affected and FreshDirect is committed to supporting these employees with resources, including severance packages, counseling, and assistance with outplacement services,” the FreshDirect spokesperon said in a statement.

Dive Insight:

The layoffs and restructuring at FreshDirect come two months after Ahold Delhaize USA announced plans to sell the online grocery service to rapid delivery firm Getir.

The FreshDirect spokesperson did not offer further details on the company’s restructuring plans or specify which divisions would be a focus for the job cuts. The company’s director of talent acquisition was among those laid off, according to a LinkedIn post. An informal list of names compiled by the former director, Stacy Porter, noted that recruiters, managers in the company’s transportation division and a senior IT director were also among the layoffs. 

Getir did not respond to a request for comment. 

FreshDirect is one of the longest-running and most successful online grocers in the U.S., but it has struggled recently to expand beyond the tri-state region it currently serves.

Investment banker Jason Ackerman, chef David McInerney and supermarket veteran Joseph Fedele founded FreshDirect in 1999. In 2021 Ahold Delhaize bought 80% of FreshDirect for an undisclosed cash price, giving the grocery giant a stronger foothold in the New York online grocery market during the pandemic-fueled e-commerce surge. McInerney, who had taken over as CEO when Ackerman stepped down in 2018, resigned in May 2021. 

FreshDirect mounted an ambitious plan to expand into additional metropolitan areas, but in 2022 it left the Philadelphia and Washington, D.C., markets. 

In November, Ahold Delhaize USA sold FreshDirect to Getir. When announcing the sale, Ahold Delhaize said it was offloading the grocery e-commerce service to focus more on omnichannel.

Getir has survived the surge of ultrafast delivery startups, which began in the early years of the COVID-19 pandemic, and the subsequent consolidation in the space as funding dried up. The company, which arrived in the U.S. in 2021 and is based in Turkey, currently serves Chicago, New York City and Boston. At the end of 2022, Getir announced plans to buy delivery competitor Gorillas.

Getir has not been without its own struggles. In August, Getir announced a global restructuring and layoff of 2,500 jobs across five countries, representing just under 11% of its total workforce, according to Reuters. 

Online grocers saw their sales soar during the height of the COVID-19 panic but have struggled as consumers have returned to in-store shopping. Startups like Farmstead have scaled back or gone out of business, while Kroger last year paused the expansion of automated warehouses fueling its proprietary delivery service.