A Bloomberg report that Blue Apron was cutting 24 percent of its staff sent shares down 5% in Friday trading, a blow for a company that’s already been struggling in the markets since its June IPO.
It turns out that it’s not as bad as it sounds. Bloomberg has since updated the story and we’ve spoken to a Blue Apron spokesperson. The layoffs note that what Bloomberg uncovered is related to a facilities transfer in New Jersey.
We’re told that employees of the Jersey City location have been given the option to transfer to the new Linden location, but if they choose not to accept, their employment will be terminated in October.
The company provided us with the following statement.
As we scale up operations at our new Linden, NJ fulfillment center, we are ramping down our Jersey City, NJ facility. Our Linden location is a brand new, 495,000 sq. ft. state-of-the-art facility that we expect will enable us to execute on our product expansion strategy. All of our Jersey City employees (currently 1270) have been offered the opportunity to transfer to a same or comparable position in Linden, and the majority of those employees have already elected to transfer. We hope that the remainder of our Jersey City employees will join us in Linden, as their knowledge and experience is invaluable.
As of March 31, Blue Apron employed 5,202 people.
The news quickly spooked investors, as it followed the company’s lackluster initial public offering, its co-founder and COO Matthew Wadiak stepping down and a lawsuit from a former employee.
Needless to say, it’s been a rough month or so for the meal kit company. Blue Apron is currently trading at $5.89 a share, well below its IPO price of $10 per share.