Blue Apron Holdings Inc. (NYSE:APRN) has announced plans to close a New Jersey facility and move those jobs to a new facility opening in the state later this year. According to a public notice, 1,270 Blue Apron employees would be affected, representing about 24 percent of the company’s workforce. According to company documents, Blue Apron had a total of 5,202 workers as of March 31.
The original Jersey City fulfillment center will close by October. The workers at the fulfillment center handle and pack the food that gets sent to customers. All workers will have the opportunity to relocate to the new warehouse. Employees who choose not to transfer will be laid off in October. Blue Apron said it expects about 470 workers will not be transferring to the new location.
More than half of the employees at the Jersey City facility have decided to move to the bigger site opening in Linden, New Jersey, about 15 miles from the old location. At 500,000 square feet, the Linden facility will be the company’s biggest. A company spokeswoman said in an emailed statement, “We hope that the remainder of our Jersey City employees will join us in Linden, as their knowledge and experience is invaluable.”
Blue Apron also plans to open another facility in Fairfield, California in 2018. In filings with the Securities and Exchange Commission, Blue Apron said, “Upon completion of our new fulfillment centers in Linden, New Jersey and Fairfield, California, we anticipate that such fulfillment centers, together with our Arlington, Texas fulfillment center, will comprise our primary fulfillment operations for the foreseeable future.”
Blue Apron currently has a fulfillment center in another Bay Area city, Richmond, which could face a similar fate as the Jersey City facility. A spokeswoman for the company declined to comment further on plans for its Northern California fulfillment centers.
The announcement comes about one month after the meal kit company went public. The shares fell 6.1 percent after the announcement. Blue Apron shares have struggled since debuting on the New York Stock Exchange. The company priced its IPO at $10 a share, a lower price than the company originally expected. They are now down more than 35 percent since the IPO.
Blue Apron competes with dozens of other startups, including Hello Fresh, and Plated, as well as with a new offering from Amazon.com Inc. Still, meal kits make up less than 1 percent of total U.S. food purchases. The company restructured its executive team last week, with co-founder and Chief Operating Officer Matt Wadiak stepping down from his role. The company said Wadiak will transition to a senior advisory role.