Blue Apron To Lay Off 10% Of Its Workforce As Business Slows
Times are again changing and Blue Apron, which saw a significant increase in sales during the pandemic, announced it is laying off 10% of its employees. According to Fortune, the layoffs are part of a more significant cut in spending as the meal-kit delivery service looks to the future.
The Wall Street Journal reported that Blue Apron has hit several roadblocks to growth, including a struggle to improve sales. Keeping customers has also proved challenging as restaurants reopened after the COVID-19 pandemic waned. In 2017, Blue Apron reported it had around 350,000 customers in its third quarter; however, that number has dropped to about 323,000 since November 2022.
At its peak, Blue Apron states it had a quarterly revenue of $238 million in 2017 but has since then plummeted to less than half of that amount (via Fortune). Another stark financial figure for the New York-based company is that it was worth $1.9 billion, but now it's valued at $30 million. Also negatively affecting Blue Apron, according to Grocery Dive, is increased competition from other meal-to-door services like HelloFresh.
Spending cuts in 2023 include reduction in marketing, consulting, and labor
To better align its operations with the current market, Blue Apron said on December 8 the goal is to cut spending by $50 million in 2023, per Fortune. According to Grocery Dive, the company's focus will be "to reduce marketing, consulting, and labor expenses," however, the cuts will still cost the company an estimated $1.2 million in severance packages. And as of June 30, 2022, Blue Apron employed 1,694 full-timers, which means, give or take, 169 people may lose their jobs (via Fortune).
Earlier in 2022, Blue Apron attempted to right some of its financial issues. Fortune reports that the company created an agreement with shareholder Joseph Sanberg to gain additional funding, but the money hasn't been received. And in June 2022, the meal delivery service tried to promote newer, exciting products like seasonal meal kits that included recipes like lobster rolls, while in August, they updated their menu items with ones that can be prepared in 30 minutes or less, such as Mafalda pasta with basil pesto.