Blue Apron Declares Hiring Freeze, Cuts Recruitment Staff
Following a lackluster IPO and the departure of its VP of human resources, meal-kit-delivery service Blue Apron has instituted a hiring freeze and let go 14 members of its recruiting staff, Tech Crunch has reported.
Just weeks after Kate Muzzatti, the HR VP, departed to join MM LaFleur, a women’s apparel startup, the service provider announced an “internal reorganization” that involved “several changes” to its organizational structure, the tech site said. This includes the development of its new consumer products team and the launch of a new fulfillment center team in Linden, N.J., which replaces a prior center in Jersey City.
Additionally, Blue Apron has been hit with several lawsuits, Tech Crunch noted, including one from an employee alleging violation of the Family and Medical Leave Act, as well as a couple from law firms alleging the service “misrepresented the challenges it faces with customer retention, delayed orders and reduced ad spend.”
Blue Apron’s IPO dropped 29 percent from its $10 debut during just its first nine trading days, likely affected by Seattle-based ecommerce giant Amazon.com’s June 16 $13.7 billion offer to purchase Austin, Texas-based natural grocer Whole Foods. Not long after, revelations that Amazon is planning a major dive into meal kits drove stock value down even further for Blue Apron, which started at $10 upon its June 28 debut.
Also not helping Blue Apron is the fact that many brick-and-mortar grocers have entered the meal-kit space. In May, for instance, Cincinnati-based Kroger introduced its Prep+Pared line of 20-minute meals for two, while Lakeland, Fla-based Publix launched Aprons Meal Kits, which feed two to four people each.
Coupled with the fact that Amazon’s kits could fit into brick-and-mortar operations if and when the Whole Foods deal closes, times don't look good for Blue Apron. Even though the New York-based service is the most preferred among meal-kit users, recent research from Fayetteville, Ark.-based research firm Field Agent shows that, when given the option, users and nonusers of kits alike may drop it and any other delivery-only services and run to their local grocers instead: Some 78 percent of consumers – 76 percent of nonusers and 78 percent of users – want, to some extent, grocery stores to develop meal kits that they could purchase in stores.