GoPuff, the rapid delivery startup known for its convenient delivery of everyday essentials, has announced a workforce reduction initiative. This move comes amidst the company’s efforts to achieve profitability by the end of 2024.

The exact number of job cuts remains undisclosed, but reports suggest it will impact “hundreds” of Gopuff employees. These cuts are expected to primarily target the company’s corporate workforce in the United States. Severance packages and continued equity in the company are reportedly being offered to departing employees.

This workforce reduction initiative signifies a broader trend within Gopuff. The company has undergone multiple rounds of layoffs throughout 2022 and early 2024. Gopuff is estimated to have shed over 1,000 jobs during this period. These cuts have been accompanied by a strategic shift towards streamlining operations and shrinking its physical footprint by closing warehouses.

The rationale behind these job cuts is rooted in Gopuff’s financial performance. The company reportedly burned through significant cash in 2023, exceeding $400 million. This financial pressure, coupled with its ambitious goal of profitability by year-end, has necessitated a reduction in operating expenses, including payroll.

GoPuff is not alone in facing these challenges. The ultrafast grocery delivery sector as a whole has encountered difficulties in recent times. Investor enthusiasm has waned, with funding for these startups declining sharply compared to previous years. Additionally, a more challenging economic climate has put pressure on consumer spending and business growth.

Looking ahead, Gopuff’s ability to achieve its profitability target remains to be seen. The success of its workforce reduction strategy will hinge on its effectiveness in curbing expenses without hindering operational efficiency. Furthermore, the overall health of the ultrafast grocery delivery market will play a significant role in determining Gopuff’s long-term prospects.