Blue Apron Announces Restructuring Strategy; Will Cut Workforce by 4%

In a bid to to accelerate its path to profitability and stem the tide of losses accrued since first going public in June of 2017, meal kit company Blue Apron has announced plans to significantly restructure its business in 2019, trimming its workforce by 4 percent.

“The ways in which consumers access meals for various occasions has evolved rapidly with expanded choice and the continued convergence of online platforms and brick and mortar stores,” said Brad Dickerson, CEO, in a company press release. “Blue Apron has an established brand and a strong foundation of loyal customers who trust and rely on the quality and convenience of our products. We are taking decisive actions to prioritize our highest-impact opportunities and build a stronger, sustainable business. As a result of these actions now underway, we expect to be profitable on an adjusted EBITDA basis in 2019. This included the difficult decision to part ways with valued employees. On behalf of the entire company, I thank these colleagues for their many contributions to the business.”

The press release noted these immediate organization-wide actions in its restructuring vision:

• Sharpening focus on direct-to-consumer business by prioritizing customer segments with proven affinity and retention, as well as attracting consumers with similar attributes
• Methodically expanding consumer reach through retail channels and on-demand platforms
• Streamlining personnel to create a more agile and focused organization, resulting in a headcount reduction of 4% of total workforce
• Further optimizing fulfillment center network to build on momentum of recently achieved operational efficiencies

At the same time the company announced the results of its fiscal third quarter 2018. Blue Apron’s report showed significant gains in adjusted EBITDA, but the company continued to suffer from shrinking revenue and profits.

Highlights from the company's Q3 include:

• Net revenue decreased 28% year-over-year to $150.6 million in the third quarter of 2018, compared to the third quarter of 2017
• Net loss was $33.9 million in the third quarter of 2018 compared to a net loss of $87.2 million in the third quarter of 2017
• Adjusted EBITDA improved 61% year-over-year to a loss of $18.8 million in the third quarter of 2018, compared to a loss of $48.0 million in the third quarter of 2017

Deli Market News will continue to report on Blue Apron and others in the shifting retail landscape.