Blue Apron lays off 10% of the company’s workforce. / Photo: Shutterstock
Once heralded as a looming threat to grocery stores, subscription meal-kit delivery service Blue Apron is laying off about 10% of its workforce in a bid to cut $50 million in expenses by 2023. The company made the announcement on Thursday.
The company will pay out approximately $1.2 million in severance payments in the fourth quarter.
Blue Apron shares fell nearly 8% on Thursday’s news. The company’s stock has fallen nearly 94% this year.
The company is in its prime as a potential grocery alternative for time-pressed consumers looking for a home-cooked dinner, with a $1.9 billion valuation after its 2017 initial public offering, according to media reports. was evaluated. After that, that valuation plummeted to just him $30 million. Blue Apron’s stock currently trades at 73 cents and is at risk of delisting from the New York Stock Exchange.
In May, Blue Apron closed a $40 million investment deal from an affiliate of the company’s longtime investor Joseph Sanberg. However, Samberg’s group did not deliver on the fundraising promised, and Blue his apron, in particular, ran short of funds.
“While the firm continues to assess the ability of Mr. Samberg’s affiliates to meet their obligations, Blue Apron is actively working with its financial advisors to sell or leverage the collateral pledged to its credit. We are maximizing the value from the collateral we pledged, including enhancing our current or future lenders,” the company said in a statement.
New York City-based Blue Apron, which debuted in 2012, said the job cuts are aimed at “creating a more agile and focused organization.”
Beyond headcount reductions, future cost reductions will focus on both short-term and long-term costs to focus on “driving towards future profitability.”
Last month, Blue Apron reported a total of 679,000 active customers in the 12 months ending September 30th. This is his 1.3% decrease from the same period last year. Total customer numbers in the third quarter were down 7.9% year-on-year.
Linda Kozlowski, president and CEO of Blue Apron, said, according to records from financial services site Sentieo, “We found our marketing efforts in the third quarter were less efficient than in the previous quarter. It has had an impact on numbers as well.” “Our product pipeline remains strong as we continue to innovate and offer our customers new and unique ways to shop with us.”
In October, Blue Apron began selling dinner kits on Amazon. No subscription signup required. The company said the move is part of a third-party sales strategy that includes selling the kit on Walmart.com in June.