Dive Brief:

• Shipt has eliminated “select positions across the organization” and closed multiple open roles, a spokesperson for the company confirmed on Wednesday.
• In all, the Target-owned company eliminated approximately 3.5% of its filled positions, according to Alabama news site AL.com. 
• News of the the layoffs comes as e-commerce demand among consumers plateaus and companies in the online space look for strategies to remain relevant.

Dive Insight:

All of Shipt’s impacted employees have been granted the opportunity to remain on payroll through November and, following that, will be provided with severance packages that include outplacement support and benefits continuation, according to the spokesperson. 

“Our business and industry have changed dramatically in the past few years, and to keep Shipt competitive and healthy, we ultimately made [this] difficult decision,” the spokesperson said in a statement sent by email. “These decisions are never easy to make, and we have worked for months to do everything we could to avoid having to take this step.”

Over the past five years, Shipt has fallen short of the hiring goals it promised state and local governments in Birmingham, Alabama, where it is headquartered. The jurisdictions agreed to provide the company with at least $19 million in combined cash incentives and tax breaks in return for boosting its local presence, AL.com reported in August. In March, Shipt asked to end its agreement with the state’s Department of Commerce because it no longer expected to generate the number jobs it originally committed to, according to the report.

Online grocery sales continue to remain under pressure post-pandemic as demand and other financial headwinds make it more inaccessible for consumers. Brick Meets Click Partner David Bishop noted in an interview in August that shoppers will continue to prioritize costs over convenience after grocery e-commerce sales fell in July. However, Brick Meets Click reported that August e-commerce sales increased roughly 9% year-over-year. 

To combat the fluctuating consumer demand, e-commerce companies are finding ways to bolster their platforms and expand their offerings. In May, Shipt unveiled plans for an updated dashboard for its membership program along with a series of new value-added perks for its members. 

DoorDash has also been advancing in the grocery sector, onboarding around a dozen new grocery partners to its digital marketplace, including The Fresh Market, Eataly, Pruett’s Food and Aldi. In June, the company also launched its newly redesigned app, which offers the ability for shoppers to use SNAP/EBT benefits for online grocery payments.