The pink slips are flying at Blue Apron (NYSE:APRN). The leading meal-kit provider announced that it had eliminated 6% of its workforce on Wednesday, cutting 320 employees loose in an effort to save money.
"I'm confident that the changes we made today will make our organization stronger and help us continue to improve the lives of our customers across the country," CEO Matt Salzberg writes in the organizational update that went out to employees on Wednesday.
Layoffs happen, but you typically don't see them take place just four months after an IPO. Then again, Blue Apron's rookie year as a public company has been a disaster. The provider of portioned out recipe ingredients with detailed cooking instructions went public at $10 in June, and it has gone on to shed nearly half of its value.
A lot of things have tripped up Blue Apron in its short tenure as a publicly traded company. The emergence of competition -- from the world's leading online retailer to a reinvigorated weight management giant -- has given investors pause, but most of Blue Apron's wounds are self-inflicted.
The biggest red flag in its prospectus was the stiff churn rate. Folks don't stay with Blue Apron long, and acquisition costs are high for customers if the novelty wears off after a few deliveries. The dagger came in early August when Blue Apron posted brutal financial results for its first quarter as a public company.
Revenue moved just 18% higher in the second quarter, a far cry from the 42% surge it posted in the first quarter after more than doubling for all of 2016. If sharply decelerating top-line growth is bad, Blue Apron's guidance was even worse. Its outlook calls for revenue to decline by 5% to 10% for the second half of this year.
In a climate where business is starting to go the wrong way it's probably not a surprise to see a freshly minted IPO pare back its workforce. Blue Apron may be flush with the proceeds of the offering, but it's not going to be able to tap equity markets to raise more capital as a dog stock. Blue Apron didn't detail where the job cuts were taking place, but CNBC went on to report that the layoffs were hitting salaried employees the hardest. Shift workers at the warehouse were largely spared, though one can imagine that those roles won't be safe if revenue continues to decline into 2018. It's a rough time at Blue Apron, and it certainly hasn't been easy being a Blue Apron shareholder.