Instacart, the grocery delivery platform, has projected its first-quarter gross transaction value (GTV) and core profits to surpass analyst expectations. Despite this optimistic outlook, the company disclosed plans to eliminate about 250 jobs, roughly 7% of its workforce, as part of a broader initiative to streamline operations and concentrate on its most “promising” projects.

The news comes amidst a challenging period for Instacart, as its shares dipped approximately 10% in extended trading following a miss on fourth-quarter revenue targets. This decline reflects broader concerns in the tech sector, where companies across the U.S. and Canada have been implementing significant layoffs to curb expenses in response to the uncertain economic climate.

CEO Fidji Simo explained in a shareholder letter that the job cuts are a strategic move to “reshape the company and flatten the organization,” aiming to enhance focus on key initiatives poised to drive transformation within the company and the industry at large.

As of mid-2023, Instacart reported having 3,486 employees. For the current quarter, the company anticipates adjusted EBITDA to range between $150 million and $160 million, slightly above the analyst consensus of $151.6 million. Furthermore, Instacart expects its GTV for the quarter to reach between $8 billion and $8.2 billion, outpacing analyst projections of a 6.1% increase to $7.92 billion.

Additionally, Instacart announced a new $500 million share repurchase program, augmenting the same amount allocated for buybacks in the previous quarter. Despite a 6% revenue increase to $803 million in the fourth quarter, the company fell marginally short of the expected $804.2 million, signaling a slowdown in growth post-pandemic surge.