Blue Apron Just Announced Massive Layoffs Due To Low Sales
In an effort to cut operating costs, popular meal subscription company Blue Apron announced last week that it would lay off a chunk of its corporate staff, according to Winsight Grocery Business. This concerted attempt to reduce its spending falls on the heels of the company's drastic decline in stock value, which has taken a 94% plummet over the past year.
A month ago, Blue Apron, which is based out of New York, had garnered 679,000 active subscribers. That's down 1.3% from the last quarter and represents a greater trend of customers trailing off from the business year after year. Fortune reported that the meal subscription company earned quarterly earnings of $238 million in 2017 but has yet to reach half of that in the most recent quarter.
While Blue Apron once competed heavily with grocery stores, now the company says it's forced to cut 10% of its corporate team.
Blue Apron slashes staff while struggling financially
After suffering financial losses and dwindling subscription sales over the past several years, Blue Apron announced it will slash 10% of the jobs on its corporate team, according to Fortune. This popular meal subscription company, which was once valued at $1.9 billion, was recently re-evaluated at just $30 million. Now, the company hopes to funnel the money it saves from cutting these positions into moving the business toward greater profits, per Investor Place.
Fox Business reported that this effort to dial back on payroll spending will also simplify internal communication and operations within Blue Apron, which launched in 2012. But the company will pay more than $1.2 million in expenses because of these layoffs.
Meal subscription services like Blue Apron rose in popularity during the pandemic because more people were cooking at home, and these kits offer a healthier, more cost-effective option than takeout, The Washington Post explained. But, now that people are eating outside the home in greater numbers, services may struggle.