Blue Apron lays off 4 percent of employees as it seeks profitability next year

Meal kit company Blue Apron announced small layoffs today as part of its Q3 2018 financial results. The layoffs, which affected four percent of Blue Apron’s workforce, are part of Blue Apron’s path to profitability.

“We are taking decisive actions to prioritize our highest-impact opportunities and build a stronger, sustainable business,” Blue Apron CEO Brad Dickerson said in a press release. “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.”

Blue Apron expects to spend about $1.6 million in employee-related expenses — mostly severance payments. That, however, will lead to an estimated $16 million in savings next year.

Blue Apron Chief Marketing Officer Jared Cluff also left the company, though he was not technically laid off.

“We came to a mutual agreement that this was the appropriate time for Jared to part ways with the business knowing he has a strong team to absorb his responsibilities,” a Blue Apron spokesperson told TechCrunch. “We are incredibly thankful for his contributions to the business.”

Blue Apron reported a Q3 loss of $33.9 million compared to $87.2 million last year during this time. Meanwhile, revenue declined to $150.6 million compared to $210.6 million in the year-ago period.

Looking forward, Blue Apron wants to expand its direct to consumer business by prioritizing relationships with its “best customer” segment.

“We expect this focus to create a more efficient business, as well as increase key customer metrics, including order rate and revenue per customer,” Dickerson said in a statement. “We believe this strategic focus will have a meaningful and positive impact on our current and future customers and deliver value to our shareholders.”