Blue Apron Holdings Inc. has announced to reduce its workforce by 10 percent. The meal delivery company is facing the challenge of stagnant sales. Hence, they are taking some drastic measures to reduce expenses and cutting workforce is one of these measures.
Reduction is cash and revenue
Blue Apron is an e-commerce business that delivers fresh ingredients and recipes to make meals for homes. The demand for its products rose significantly during the pandemic times. However, Blue Apron sales are decreasing drastically amid ease in pandemic related conditions. Moreover, the company is also facing stringent competition from other players in the market. Therefore, the incumbent market conditions are forcing the company’s management to seek ways to reduce its expenses. Last month, the company said that its cash had decreased from $82.2 million at the end of 2021 to around $30.1 million as of Sept. 30. Hence, the company has now decided to lay-off 10 percent of its workers to reduce its expenses.
$50 million savings in 2023
Blue Apron is expecting to slash its spending by as much as $50 million in 2023. According to company’s statement, they want to create a nimble, focused organization and to better align internal resources with strategic priorities. These savings will help the meal delivery company in strengthening its balance sheet. However, Blue Apron expects that efforts to cut costs will help if they have enough cash flow to remain in compliance with the minimum liquidity covenant.
$1.2 million for severance payments
The New York based meal delivery company had 1,657 active full-time employees as of September 2022. Therefore, the lay-off decision may affect more than 150 employees. Moreover, Blue Apron is expecting to spend about $1.2 million in relation to these layoffs. Most of this this amount will primarily go in severance payments to outgoing employees.
Blue Apron is losing its appeal among the consumers and its revenue is shrinking rapidly.
Browse for job opportunities in New York
Keep up with the latest employment news across United States