Shipt is planning layoffs, closures of open positions

Target-owned same-day delivery service Shipt is laying off workers and closing open positions to keep it “competitive and healthy” amid a changing delivery landscape, the company confirmed Thursday.

Shipt did not say how many employees are being let go or which roles are affected, but Alabama-based publication AL.com reported that Shipt was cutting about 3.5% of its open positions.

“Our business and industry have changed dramatically in the past few years, and to keep Shipt competitive and healthy, we ultimately made the difficult decision to eliminate select positions across the organization,” Shipt’s Chief Communications Officer Molly Snyder said via email. “In addition, we closed many of our open positions. 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.”

Shipt employees whose jobs are being eliminated can stay on the payroll through November, Snyder said. After that, they will be offered “comprehensive” severance packages that include support in finding new jobs as well as benefits continuation.

Shipt has nearly 850 corporate employees, most of whom are based at company headquarters in Birmingham, Alabama, AL.com reported in August.

The company was promised at least $19 million in cash incentives and tax breaks by state and local governments in 2018 if Shipt kept bolstering its local presence by hiring hundreds of workers, the publication noted. Most of those funds have been withheld.

Minneapolis-based Target purchased Shipt in 2017 for $550 million, a move designed to “close that last-mile delivery gap from days to minutes,” Target CEO Brian Cornell told analysts at the time.

Target does not disclose Shipt’s financial results. But the company reported that the delivery platform’s sales grew more than 300% early in the pandemic.

Delivery demand, of course, has ebbed significantly since the days of quarantine, and Target has seen growing demand for its curbside pickup offering.

In September, fewer and smaller online grocery orders resulted in a 3.1% year-over-year decline in sales, according to the most-recent Brick Meets Click/Mercatus grocery shopping survey. Household penetration of pickup orders grew to 59% of monthly active users, a record, while delivery demand fell to 39%.