Blue Apron Holdings Inc. is closing a New Jersey facility and moving 1,270 jobs to a bigger site opening in the state later this year.
More than half of the employees at the Jersey City facility have decided to move to Linden, New Jersey, a company spokeswoman said. According to a public notice, the original Jersey City fulfillment center will close by October. Workers notified Friday of the changes will still have the opportunity to relocate to the new warehouse, the spokeswoman said.
A W.A.R.N. notice, which requires employers to provide 60 days notice of plant closings and mass layoffs, appeared Friday saying that 1,270 Blue Apron employees would be affected. That represents about 24 per cent of the company's workforce. Blue Apron subsequently explained that the positions were being moved to another facility.
The announcement comes about one month after the meal kit company went public. Last week, the company restructured its executive team. Chief Operating Officer Matt Wadiak – who was also a co-founder – stepped down from his role. The shares fell 6.1 per cent to $5.84 at 3:22 p.m. in New York. They were down more than 35 per cent since the IPO through Thursday.
Meal kits, a relatively new phenomenon, make up less than 1 per cent of total U.S. food purchases and have yet to prove they're more than a niche market. Blue Apron competes with dozens of other such startups, including Hello Fresh, and Plated, while Amazon.com Inc. has also shown it's interested in getting in. Blue Apron has had to spend heavily on marketing just to educate consumers about the product and distinguish itself.
In February, Blue Apron said it expected to need 2,000 workers for the Linden facility when it opens and will continue to hire to meet its needs after that.
Blue Apron had a total of 5,202 workers as of March 31, according to company documents. Most of the employees sort, clean and assemble food into boxes that correspond with recipes for making dinner at home.
The Linden facility, at 500,000 square feet (46,452 square meters), will be the company's biggest and will include better automation technology. It's part of Blue Apron's expansion strategy, including rolling out more product options. Blue Apron also plans to open another facility in 2018 in Fairfield, California.
Even as Blue Apron seeks to expand, analysts and investors are expressing concern about Amazon. com Inc. The e-commerce giant announced it was buying grocery chain Whole Foods Market Inc. just days before Blue Apron's IPO, forcing it to reduce its offering price by 34 per cent.