On-demand grocery app Gorillas lays off half its office workforce

Photo by Annette Riedl/picture alliance via Getty Images

Half of the office staff at the grocery app Gorillas are being laid off. In a press release, the company said it was letting go of roughly 300 employees from a global office workforce. 14,400 staff are working in warehouse and as delivery drivers.

The UK, US, Germany, France, and the Netherlands make up 90 percent of the company's revenue. The company is looking at all possible strategic options for the Gorillas brand in Spain, Italy, and Belgium.

The news suggests trouble for the sector. Over the past few years, a huge number of these services have sprung up around Europe, fueled by venture capital investment and lock-down orders. These companies all rely on the same basic infrastructure: warehouses filled with groceries scattered throughout urban centers and armies of e-bike and scooter-riding delivery drivers to deliver the goods.

Many experts have warned that these services are unsustainable, with their growth predicated on discounted prices that have been funded by VC funds hoping to capture what remains of the market once a few dominant players emerge. According to a report by The Information last August, one upcoming player was losing as much as $159 on each order it delivered in the US.

The impact these firms have on urban infrastructure has been objected to by some countries. In the Netherlands, for example, grocery apps like Flink, Getir, and Gorillas have been forced to limit the speed of delivery drivers and keep their warehouses out of certain built up areas.

Some delivery apps that have struggled to grow may be in trouble because of the global downturn. In May of this year, the Gorillas app was downloaded just 320,000 times, compared to 1.5 million downloads for Turkish rival Getir.