10-Minute-Delivery Startup Gorillas Lays Off Staff

Gorillas says it’s focusing on its five core markets and with that focus comes the layoffs.

May 25, 2022

Gorillas Delivery Worker on a Bike

ALEXANDRIA, Va.—Gorillas, which promises 10-minute grocery deliveries, is laying off nearly 300 office staff members, or about half of its 600 “global office workforce,” reports The Verge.

Gorillas says it’s focusing on its five core markets that bring in 90% of its revenue: Germany, France, U.K., the Netherlands and the U.S. The company has a presence in Italy, Spain, Denmark and Belgium but said it’s “looking at all possible strategic options for the Gorillas brand” in these markets.

“In our five core markets, we realigned our priorities with our cost structure: a 100% focus on our customers and the Gorillas brand. We will be working even more on our assortment, our pricing, our order experience and our logistics to bring our customers the best shopping experience possible,” wrote Gorillas in a news release. “At the same time, we will continue developing the Gorillas brand and position it as the market leader, to further build a bold, authentic and value-driven brand.”

“While this was an extremely hard decision to make, these are necessary moves that will help Gorillas to become a stronger and more profitable business with a sharpened focus on its customers and its brand,” wrote Gorillas.

A recent Wall Street Journal article reported that rapid delivery has faced headwinds due to intense competition in the space and high expenses. Normal speed delivery services use gig workers, but many rapid grocery delivery services, like Gorillas, hire employees to make sure they can quickly source and deliver orders.

Market saturation could prompt wage cuts, with instances already happening in New York City. Once DoorDash started its Manhattan rapid-grocery pilot, it cut driver pay. DoorDash told the New York Times that it has increased drivers’ average earnings per “active” hour, meaning workers don’t get paid for time spent waiting for orders to come in, by over 30%.

In Berlin, the Times reports that Gorillas workers feel they are not being treated fairly and are organizing to receive better treatment. One worker lost his job after arriving 45 minutes late to a shift, despite alerting his manager, and another worker threatened to file a lawsuit to receive pay the company owed them. The workers often carry bags on their backs that weigh more than 22 pounds, which is over the legal weight limit, leaving the bikes that workers ride unstable.

Gorillas defended the hiccups in its labor force, saying that challenges happen when a company disrupts an established market. “Our current economy requires a certain amount of flexibility to allow for innovations to develop,” Adam Wacenske, Gorillas’ U.S. head of operations, told the Times.

In Berlin, the noise from the Gorillas warehouses is prompting some residents to call the police, and one warehouse owner says that she understands why they are upset, as the shop is open from 6:30 a.m. to midnight. The bikes parked outside the warehouse are reportedly seen as a nuisance on Berlin’s streets, and the same is happening in New York.

Dr. Moritz Altenried, a sociologist at Humboldt University in Berlin, says this is an urban planning problem, telling the Times, “These services need space for operations and delivery, and the infrastructure is not there for them to roll out so quickly.”

However, Instacart Chief Financial Officer Nick Giovanni is bullish on the rapid delivery trend. Giovanni told the Journal in an interview that he thinks the trend could stick around because consumers will “absolutely” still be demanding quick delivery of groceries in 10 years, as they will have become accustomed to the speed.

According to NACS’ “Last Mile Fulfillment in Convenience Retail” report, 61% of retailers are satisfied with their third-party delivery partners. Concerns include high fees, little access to consumer data, difficulties delivering age-restricted products and service and operational issues. Read more about these challenges and what c-stores are doing to make delivery work for their businesses in “Delivering Convenience” in the December 2021 issue of NACS Magazine.