Blue Apron Announces Layoffs as Subscribers Rein in Spending

Blue Apron has announced that it is laying off about 10% of its corporate staff.

The meal kit company shared the news in a press release Thursday (Dec. 8) in which it also stated that it intends to reduce expenses by around $50 million in 2023 relative to this year. These cutbacks include decreasing spending on marketing and consulting in addition to labor.

The news comes as the company risks breaching its $25 million minimum liquidity covenant.

“We’re working on a number of cost savings initiatives and in discussions with financial advisers to evaluate financing and other alternatives,” interim Chief Financial Officer Mitchell Cohen told analysts on a call last month discussing the company’s third-quarter financial results. “We also are in discussions with our lenders, as assuming we receive no [additional] funding, [we] expect to be in breach of our minimum liquidity covenant as early as later this month.”

The news comes as consumers cut back on their subscription spending amid the economic downturn. Research from last month’s study, “Subscription Commerce Conversion Index: Subscribers Seek Affordability And Convenience,” a PYMNTS and collaboration, which draws from a survey of more than 2,100 U.S. consumers, finds that subscription rates are down in all categories except streaming, and the average number of subscriptions per retail subscriber dropped to the lowest level since early 2021.

Get the study: Subscription Commerce Conversion Index: Subscribers Seek Affordability And Convenience

Moreover, the study found that about one in four consumers who subscribed to a food and beverage service intend to cancel their plan in the next 12 months.

Indeed, Blue Apron is not the only major meal subscription company that has had to make significant changes in response to the economic slowdown. Last month, Nestlé announced that it is partly offloading its Freshly meal delivery business following disappointing results. The food and beverage company is forming a partnership with private equity firm L Catterton whereby the ready-made meal company will merge with the firm’s Kettle Cuisine food production company.

Amid all this belt-tightening, some degree of churn is to be expected, and all subscription services can really do is make sure that they are providing consumers with as compelling a product or service and as frictionless a purchasing experience as possible.

“Retention is directly correlated to the quality of the customer experience, which stems from quality products, timely service and good user experiences on the website,” Justin Shoolery, head of data science and analytics at, said in an interview with PYMNTS for the Subscribe and Scale Series.

Additionally, consumers are specifically looking to cut down on food spending. Research from the October edition of PYMNTS’ Consumer Inflation Sentiment study, “Consumer Inflation Sentiment: Consumers Buckle Down On Belt-Tightening,” which is based on a September survey of 2,600 U.S. consumers, finds that 58% are cutting down on nonessential grocery spending. Additionally, 47% are switching to cheaper merchants.

Read the report: Consumer Inflation Sentiment: Consumers Buckle Down On Belt-Tightening