Blue Apron’s stock fell 5.7% after the company said it would lay off 4% of its workers in an effort to push the company closer to profitability.
The announcement came as Blue Apron reported earnings for the third quarter. The company said revenue fell 28% from the same quarter in 2017 to $151 million, while its net loss declined to 18 cents a share from a loss of 47 cents a share. Cash on hand declined to $163 million at the end of the quarter from $229 million a year earlier.
Blue Apron’s customer base shrank in the previous year, although remaining customers are ordering more meals. The company reported 717,000 customers in the third quarter, a decline of 16% year over year. However, the number of orders per customer increased to 4.4 from 4.2.
Since going public at $10 a share in June 2017, Blue Apron’s stock has lost nearly 90% of its value. After announcing earnings and the layoffs, the stock fell as much as 5.7% in after-hours trading.
In a statement, the company said it would push toward profitability by focusing on consumers with “proven affinity and retention,” while partnering with more retailers and on-demand platforms. The reorganization would also lead to the loss of one in 25 Blue Apron jobs.
Blue Apron said it will incur $1.6 million in severance charges this quarter. The layoffs will help it save about $16 million a year.
“We are taking decisive actions to prioritize our highest-impact opportunities and build a stronger, sustainable business. As a result of these actions now underway, we expect to be profitable on an adjusted EBITDA basis in 2019,” said CEO Brad Dickerson. “This included the difficult decision to part ways with valued employees.”
EBITDA refers to earnings before income taxes, depreciation and amortization—a metric that excludes certain costs that are factored into net income.