As Blue Apron approaches its next earnings report in a couple of weeks, the company said Wednesday that it is laying off 6 percent of its staff as part of “a company-wide realignment of personnel to support its strategic priorities.”
Blue Apron was one of the big — and most anticipated — consumer IPOs of the year, but it’s also now one of the companies that represent the major challenges consumer IPOs have faced throughout the year. Since going public, Wall Street has cut Blue Apron’s stock price in half and it’s barely been able to retain unicorn status. The company is an example of a complex business that can face significant challenges acquiring and retaining customers, as well as one that faces an existential threat from Amazon.
These layoffs hit both the company’s corporate offices and fulfillment centers and will add up to hundreds of jobs. Blue Apron said it had 5,393 employees on June 30 this year, which, depending on the number of employees the company still has, will still probably amount to more than 250 layoffs.
“A company-wide realignment, like the one we announced, is always painful, and especially so for a close-knit team like ours,” CEO Matt Salzberg said in a note to employees. “Our leadership and Board did not take this decision lightly, and I want to assure you that we believe it was necessary as we focus the company on future growth and achieving profitability. The actions that we took today flowed from the roadmapping (sic) and reprioritization exercise that we recently undertook. As part of that work, we identified the need to reduce some roles, open others, and streamline decision making for greater accountability. Wherever possible, we sought to fill new roles with existing employees.”
A round of layoffs probably wasn’t all that unexpected as the company looks to make some changes in a competitive — and difficult to navigate — field. Blue Apron COO Matthew Wadiak stepped down in July, and in August the company laid off 14 recruiters. Given the complex nature of its business, and the ever-present threat from Amazon, Blue Apron has to figure out a new strategy going forward that will convince Wall Street that it should be an independent company that can continue to grow.
Blue Apron is a company that investors are going to be aggressively scrutinizing when it reports its earnings in a few weeks because the company has to show it can get its affairs in order if Amazon were to ever bulldoze into its turf. In addition, one of its competitors HelloFresh, is also planning to go public. Blue Apron has to ensure that it can retain customers that might be jumping on board as a promotion or as part of a gift, especially as it starts to pull back on its marketing spend.