Dive Brief:

• Blue Apron is cutting about 10% of its corporate workforce as part of an effort to reduce its marketing, consulting and labor expenses by up to $50 million in 2023, the meal kit seller announced Thursday.
• The company expects the layoffs to cost it about $1.2 million, mostly due to severance payments.
• Blue Apron lost customers and posted flat revenue during the third quarter compared with the same period in 2021 even as archrival HelloFresh’s U.S. business strengthened by both of those measures.

Dive Insight:

Blue Apron’s fortunes are sagging dramatically as the company deals with robust competition in the ready-to-eat meal sector and the pandemic-related conditions that had helped propel demand for its products have petered out.

Those headwinds have crimped Blue Apron’s operations, eating away at its finances and forcing executives to find ways to save money. The company said in November that its cash and cash equivalents had fallen to around $30.1 million as of Sept. 30, down from nearly $82.2 million at the end of 2021.

In addition, Blue Apron said it had been unable to collect $56.5 million it is owed by affiliates of investor Joseph Sanberg in connection with a private stock transaction. The company said it now has the right to foreclose on shares of private entities Sanberg’s affiliates put up as collateral and is looking into ways to sell or leverage those assets.

Blue Apron noted in November that the cash crunch it is facing could cause it to fall below the liquidity threshold it is required to maintain to comply with its borrowing obligations. On Thursday, however, Blue Apron said that it believed its efforts to cut costs would help it have enough cash flow to remain in compliance with the minimum liquidity covenant.

Blue Apron said in a quarterly report filed with the Securities and Exchange Commission in November that its customer base had fallen to about 323,000 during the third quarter from approximately 350,000 during the same period in 2021. By comparison, Germany-based HelloFresh saw its active customer count in the United States rise 5.5% year-over-year in the third quarter, to 3.67 million.

Investors have sharply bid down Blue Apron’s stock price in 2022 as the company has struggled. Blue Apron shares declined more than 17% on Thursday, closing at 70 cents and continued to drop on Friday. The company, which trades on the New York Stock Exchange, has seen the value of its shares decline about 90% so far this year.