Blue Apron Lays Off 6 Percent Of Employees

Blue Apron, the struggling meal kit delivery service that has seen its share price decline close to 50 percent since its June IPO, is reducing its workforce by about 6 percent.

Citing a letter sent to employees by Blue Apron Chief Executive Officer Matt Salzberg, CNBC reported the decision was due to a roadmapping and priority focus exercise in which the company recently engaged. The leaders of the embattled meal kit company purported that the reduced number of employees would improve decision making.

“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,” Salzberg said in the letter, according to CNBC. The workforce reductions are happening in the company’s corporate offices as well as in its fulfillment centers.

Blue Apron expects to recoup about $3.5 million in expenses as a result. Most of the costs are due to severance payments and will be realized in the fourth quarter. Back in August, CNBC noted that the company laid off 14 employees from its recruiting team and put a hiring freeze in place.

In addition to the personnel moves back in August, in the same month the company was hit by a lawsuit from a disgruntled investor who claimed the firm knowingly and intentionally misled him and its other investors. Shareholder Ahmed Chaudhry alleged that the firm made “misleading” and “untrue statements” in its filing with the Securities and Exchange Commission leading up to its public offering. The suit also goes after the investors and lenders who underwrote Blue Apron’s IPO – Goldman Sachs, Morgan Stanley, Citigroup Global and Barclays Capital.

The suit is filed for any and all purchasers of Class A common stock in the firm. Specifically at issue: The suit claims Blue Apron failed to disclose delays to a new factory being constructed (which delayed new product roll-outs) and that it had already decided to lower its advertising budget by the second month of 2017. The suit also alleges that Blue Apron execs knew of Amazon’s coming competition and that it had serious issues getting ingredients straight and meals delivered on time.