Blue Apron cuts another 20% of its workforce amid sharp customer drop in Q2

Struggling meal kit-maker Blue Apron, which transferred its operational infrastructure to FreshRealm for $50 million in June as it moves to an asset-light model, cut another 20% of its corporate workforce last month, the company revealed Wednesday in reporting its second-quarter results.

The move follows Blue Apron’s decision in December to lay off 10% of its total corporate payroll as it looked to cut $50 million in expenses this year.

But the company has continued to lose customers since then, with second-quarter net revenue down 14.5% year over year.

For the quarter ended June 30, Blue Apron said it logged “record customer engagement metrics,” driven in part by a price increase that boosted average order values to $75.66, a 12.7% lift from the year before.

Blue Apron reported a total of 267,000 customers during the second quarter, a 30% drop from a year ago. Total orders fell more than 21% from the prior year. But average revenue per customer of $397 was up 21.3% year over year, the company said.

The meal kit company said it expects net revenue and customer counts to continue to plunge at the close of 2023 because it is spending less money on marketing. But Blue Apron said it expects to achieve EBITDA profitability and year-over-year revenue growth by the end of 2024.

Blue Apron said it was debt free and had approximately $30 million in cash and cash equivalents at the end of the quarter. The company also noted it had reduced its year-over-year operating cash burn by more than 70% and reported its strongest margins since 2020.

“We are confident we have sufficient capital from operations to achieve our adjusted EBITDA profitability goal and to continue to move the business forward following the FreshRealm transaction,” Blue Apron President and CEO Linda Findley said in a statement. “While the outsized net loss for the quarter was due to the one-time, non-cash charge associated with the transfer of our operational infrastructure, it does not account for the full financial incentives from FreshRealm and planned cost savings. We see this transaction as financially beneficial for the company starting in 2024 with a lower fixed cost base, a stronger balance sheet and new revenue opportunities, including the introduction of a new product line expected in the first half of next year.”

When Blue Apron closed on the FreshRealm deal in June, it said it was planning further layoffs to streamline operations.

Under the terms of the deal to the Ventura, California-based meal provider, Blue Apron transferred all of its operational infrastructure, including fulfillment centers, equipment, know-how and related personnel, the company said at the time. FreshRealm becomes the exclusive supplier of Blue Apron’s meal kits for at least the next 10 years. Prior to the acquisition, FreshRealm was the manufacturer of Blue Apron’s line of heat-and-eat meals.

Blue Apron was founded in 2012 and, along with other meal kit providers, was briefly seen as a looming threat to both grocery stores and restaurants. The company went public in 2017 but has struggled to acquire customers in the years since.

This story has been updated to better reflect Blue Apron's transaction with FreshRealm.