Instacart, a popular grocery delivery service, has announced plans to lay off about 250 employees, which accounts for roughly 7% of its workforce, as part of a restructuring effort. The decision was revealed alongside the company’s fourth-quarter earnings report, which closely matched analysts’ revenue estimates.

The layoffs are primarily targeting middle management positions with the aim of creating a more streamlined organizational structure. Instacart also intends to redirect its teams towards larger projects, including advertising initiatives on platforms like Roku and Google Ads.

Additionally, three high-ranking executives, namely Chief Operating Officer Asha Sharma, Chief Technology Officer Varouj Chitilian, and chief architect JJ Zhuang, are departing from the company for personal reasons. Notably, Instacart has decided not to fill the CTO role vacated by Chitilian.

Despite the company’s efforts to adapt and grow, its fourth-quarter revenue of $803 million was only marginally below Wall Street’s expectation of $804 million. This performance comes after Instacart’s milestone IPO in September, where it emphasized its commitment to integrating artificial intelligence and machine learning features into its platform to drive future growth.

Instacart, which operates in over 5,500 cities and partners with more than 85,000 grocers and stores, experienced a surge in demand during the Covid-19 pandemic as consumers sought alternatives to in-person shopping. However, like many businesses within the gig economy, achieving profitability has presented challenges due to substantial costs associated with contractor payouts.

As the company navigates these changes and continues to evolve, the impact of the restructuring and the departure of key executives will undoubtedly shape its trajectory in the competitive grocery delivery market.