Editor’s note: This post has been updated with a more accurate estimate of the number of jobs affected by the cuts.
Blue Apron is cutting approximately 6 percent of its workforce, as the meal kit company looks to regroup following a rough period since going public earlier this year.
In a filing with the U.S. Securities and Exchange Commission, the company said the layoffs would cost about $3.5 million, mostly due to severance payments. In its most recent quarterly report, the company said it had 5,393 employees as of the end of June. Using those figures, the layoffs would affect approximately 323 positions.
In a letter to employees, Blue Apron CEO Matt Salzberg said the layoffs “flowed from the roadmapping 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.”
Blue Apron has cut spending on marketing and is ramping up a new automated distribution center in Linden, N.J., a move the company previously said forced it to delay some of its new product launches.
Blue Apron delivers quality, pre-measured ingredients with original recipes so customers can cook at home without planning meals and grocery shopping. Each meal comes out to about $10 per serving.
When Blue Apron cut its IPO price, the common assumption was that Amazon’s blockbuster purchase of Whole Foods Market played a role. Since then, GeekWire reported that Amazon established its own meal kit delivery business, putting it in direct competition with Blue Apron.
Salzberg did not address Amazon on the company’s first quarterly earnings call as a public company, but later mentioned the retail giant in an interview with CNBC. He said at the time there is plenty of room in the grocery business for a variety of different business models, including traditional grocers, Amazon and Blue Apron.
“We admire Amazon as a company, and we take them seriously, big or small,” Salzberg said. “That being said, we are competing in a competitive and large market … We think about ourselves very differently, I think, than Amazon thinks about themselves.”
Though the competitive heat has been turned way up thanks to Amazon’s grocery and meal kit push, Blue Apron still has strong brand recognition and remains the leader in the meal kit delivery space. Blue Apron had over a million paying customers ordering nearly $800 million in revenues in 2016.
Here is the full text of Saltzberg’s letter to employees, disclosed in an SEC filing:
From: Matt Salzberg
To: All Employees
Date: October 18, 2017
Subject: Organization Update
Today was a difficult day for our entire organization, but I want to thank you for the leadership and respect you demonstrated throughout the day.
A company-wide realignment, like the one we announced, is always painful, and especially so for a close-knit team like ours. 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 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.
What makes this decision especially difficult was that we parted ways with many dedicated and talented colleagues, as well as friends whom we care deeply about. I want to thank them for their numerous contributions over the years, and wish them the best going forward. It was particularly important to us that we show this respect and appreciation with meaningful severance packages and ongoing job placement support, which we are in the process of providing.
As CEO, I promised you that I would be frank and transparent as we invest in and position our company for the future. I will be hosting a Q&A session shortly and hope you can join. I also encourage you to find me during my regular office hours for a conversation, or to email me directly with any questions.
We have accomplished so much together over the past five years, and no words can adequately describe my appreciation for the work you do each day. I’m confident that the changes we made today will make our organization stronger and help us continue to improve the lives of our customers across the country. I believe in where we are going, and I believe in our team’s ability to get there together.