July 16, 2022
GoPuff, the Philadelphia-based online delivery service, announced plans to lay off 10% of its workforce this week after it fielded more than $3.5 billion from investors last year.
The latest set of layoffs – which impacted about 1,500 warehouse and tech employees, Bloomberg reports – came after the company axed 3% of its workforce in March.
GoPuff is also planning to close 76 of its warehouses in the U.S., about 12% of its footprint.
The company's founders and co-CEOs Rafael Ilishayev and Yakir Gola wrote in a memo to investors that the instant needs industry is at a turning point as the nation faces a recession. But they're also not worried, since GoPuff reportedly has $2 billion in the bank.
“We’ve never needed investors,” Ilishayev told Technical.ly last month. “We’ve positioned the business to have maximum amount of flexibility, and as a by-product of that, we’re prepared for what’s to come.”
Still, last year GoPuff nixed its plans for an initial public offering.
The company has expanded rapidly in recent years by setting up thousands of fulfillment centers across the U.S., moving into Europe and acquiring several international companies with a similar business model.
But as a recession looms, the company is looking to consolidate its footprint. For example, five of its two dozen warehouses in the New York City area will close, the Philadelphia Business Journal reported.
The most recent layoffs will save the company $100 million per year.
As the venture capital funding that facilitated GoPuff's expansion dries up, the company expects its growth to slow.
Ilishayev and Gola founded the company in 2013 while they were students at Drexel University. Its main headquarters is in the Northern Liberties.