
Blue Apron Plans to Cut 24% of Staff Barely a Month After IPO - coloneltcb
https://www.bloomberg.com/news/articles/2017-08-04/blue-apron-plans-to-cut-24-of-staff-barely-a-month-since-ipo
======
Spivak
Look, I get that most people are just going to read the headline, hell most
people who share this article will probably never open it, but that's really
no excuse for writing an 'article' that has no more substance than the
headline.

Questions I want answered in an article like this:

* What is Blue Apron's reason for the job cuts?

* What are Blue Apron's plans for the future? Focusing on core markets, expansions, grocery store partnerships, more product offerings?

* What do their finances look like? Things like customer acquisition, subscription length, service costs? How did the job cuts affect them?

* What is the author's analysis of the situation?

* How's the meal-prep market doing overall?

* Is there a downward trend in these kinds of convenience services?

* Was this going to happen anyway or was there increased pressure from the IPO?

* Is this typical for companies that IPO?

~~~
tyrust
>that's really no excuse for writing an 'article' that has no more substance
than the headline

I don't really agree. This is breaking news and it is unlikely that the
distributor has any of the answers to the questions you've asked. Readers of a
new distributor (here, Bloomberg) get the convenience of having to only follow
one source to get a variety of breaking news.

~~~
padobson
Seems like there's an opportunity for a publishing platform that can pull up
answers to rudimentary questions like these and include them in sidebar to
breaking new like this.

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digitalneal
Didn't Blue Apron and Square Space alone underwrite like half the podcasts in
the world last year? Wonder what this means for podcast advertising in
Q4/Q1-18

~~~
peternicky
Never heard 'underwrite' used in that context. Can you provide links?

~~~
mkmk
A bit of context:

Due to regulations about advertising on publicly owned wavelengths, one cannot
place a 'direct response' ad on a public radio station (think of your local
NPR station here). Instead, there is an 'underwriting message' allowed–
typically shorter than a traditional ad, and with no direct sales pitch.

Usually somebody that buys podcast ads is also buying radio ads, and sometimes
the terms they use get muddy. 'Underwrite' is probably the wrong term to use
for podcast advertising, but since it's frequently used for public radio the
meaning would be clear if you were in the industry.

~~~
jonbarker
So you can't use offer codes and promo codes on fm/am? Pretty sure I've heard
people use those. Is my definition of "direct response" not correct?

~~~
mattkrause
The restrictions @mkmk is talking about apply to public radio stations, like
NPR (and maybe some college stations).

The key distinctions are that underwriting has to be short (15 seconds each,
60 seconds total), non-competitive (you have to mention them all underwriters
of a program), only at the beginning/end, and can't include a call to action.
In other words, an underwriting message can say "This program brought to you
by Crazy Eddie's Autos, purveyors of new and antique European cars" but not
"COME ON DOWN to CRAZY EDDIE'S AUTO'S. WE'RE HAVING A BLOW-OUT SALE THIS
WEEKEND ONLY blah blah"

Privately-owned stations can and do run either kind, however.

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leothekim
That headline is misleading. CNBC is reporting this:

"The company's employees were given the option to transfer to the new facility
located in Linden, New Jersey. The 1,270 cut jobs indicate those who decided
not to transfer, the company said."

[https://www.cnbc.com/2017/08/04/blue-apron-to-cut-more-
than-...](https://www.cnbc.com/2017/08/04/blue-apron-to-cut-more-
than-1200-jobs-by-october.html)

~~~
leothekim
And now the Bloomberg headline for the same link changed to "Blue Apron Is
Closing Jersey City Facility and Moving 1,270 Jobs". This is irresponsibly
different from the original "Blue Apron Plans to Cut 24% of Staff Barely a
Month After IPO" headline.

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lamename
"... the meal-kit delivery company shifts operations to a bigger site opening
in the state later this year...the cuts reflect employees who chose not to
make the move."

Sucks for employees who can't make the move, but from the company's
perspective, this just precedes growth, no?

~~~
shampine
Yes it seems that way and the headline is extremely misleading.

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ProfessorLayton
Looks like this isn't true:
[https://twitter.com/mdudas/status/893540763921002496](https://twitter.com/mdudas/status/893540763921002496)

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ControlledBurn
Seems a bit clickbait-y to me, as the article implies the 1,270 cuts are
employees that chose not to move to a new facility that's only 15 miles away.

~~~
bbarn
A bigger facility, at that. Sounds less like trouble and more like growth.

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losteverything
<cutting 1,270 jobs from its New Jersey facility according to a public notice
Friday. It had 5,202 workers as of March 31.

Doesnt that seem like a lot of employees?

I know an average walmart non supercenter store has around 210 total
employees.

There tasks must be very labor intensive

~~~
pavel_lishin
> _There tasks must be very labor intensive_

If these are the folks doing the food prep, almost certainly. Have you ever
used something like Blue Apron? All the ingredients have to look good, and be
packaged into little individual servings - think two cloves of garlic in a
vacuum sealed bag.

Times six for the five other ingredients in the bag, many of which are
probably more fiddly than "put two cloves of garlic into bag, and place into
vacuum sealer."

Times, say, five thousand packages that have to go out and get delivered
tonight so people can make their dinner.

~~~
losteverything
So.. Their orders won't decrease 24%

The remaining employees will have to work faster and harder.

~~~
pavel_lishin
Or the quality of their product may suffer. Or they've come up with a way to
automate or 'outsource' garlic-bag-stuffing.

~~~
VLM
Most likely once the garlic guy is fired, the recipe selections will no longer
include garlic-lime chicken, or situation extremely similar to this.

~~~
thesmallestcat
What is extreme similarity? Identity?

~~~
VLM
Garlic is simply too common in most cooking to eliminate, so the outcome will
be extremely similar with obscure ingredients like lemongrass or papaya or
thai chile paste.

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this_user
This IPO has been a complete disaster: The initially lowered the price range,
and then did the IPO at the low end of $10. Stock opened for trading at
exactly that level, instead of higher, and has lost around 40% since then.

Normally this IPO would not have been that big of a deal. But since the tech
IPO pipeline is largely frozen at the moment, APRN was widely seen as a canary
in the coalmine for the sector. The fact that it was this poorly received,
only underlines the fact that there is currently sector rotation out of tech
going on.

~~~
manigandham
This isn't a tech* company. It's a prepared food/grocery delivery business
with too much VC and some fancy design.

*there's actually no such thing as a tech company at all

~~~
hari_seldon_
The way that I think about a "tech" company is that it is able to scale its
growth non-linearly with its staff (or human resources). This isn't a binary
rule, and obviously many successful companies are in a gray area -- but I
think that it serves as a good litmus test / starting point when thinking
about companies.

For example, an app that is running on a few servers can gain users more
quickly than it needs to hire additional workers. A company like Blue Apron
has to grow its warehouse staff as it gains new subscribers, effectively
meaning that its SG&A and overhead costs scale fairly evenly with growth.

~~~
Edmond
My general definition of a technology company:

 _Do you make /sell Software

_Do you make/sell computerized hardware

*Do you have a platform that fundamentally solves what would otherwise be a technology problem for other people, ie expose your technology so others can leverage it(via API/SDK, SaaS or other such on-boarding method).

None of this is clear cut as there are many grey areas but in general if you
are creating technology for others to use and that is your core operation then
you're a technology company.

Selling packaged food while using an App or Website does not make you a
technology company. Blue Apron could completely outsource their technology
work and I doubt it would fundamentally change the makeup of the company, you
couldn't do that with a technology company.

~~~
tom-_-
Some other ways I measure the "techiness" of a company; how much of the
payroll is spent on engineers and if they're using software to replace value
typically provided by people.

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victor106
Blue Apron sucks. This week was the first time we ordered from them. The
garlic they sent was spoiled and rotten. It took quite sometime to make and
the instructions are unclear. We will trying other services but never Blue
Apron

~~~
jajern
We've been through most of them. I liked Hello Fresh but that wasn't amazing
either. Even though ingredients are mostly prepped the preparation and cooking
can be pretty time consuming. Lately we've been working on recipes with small
ingredient lists that share ingredients. It's cheaper, easier and bigger
portions. I like having leftovers to take to work the next day. We don't like
grocery shopping but most of the stores near us are doing either at the door
pickup or even delivery.

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cs702
This is EXTREMELY unusual -- in fact, _unheard of_ \-- for a company that just
consummated its IPO.

Historically, companies that IPO are in growth mode; they use the IPO to raise
more money to fund more investment in growth opportunities.

Think of it this way: in an IPO (initial public offering), a typically young
company offers newly issued shares to public-market investors in exchange for
fresh money. The investors buy those newly-issued shares if they believe the
company can put the money to good use, for example by investing in growth
opportunities. If investors believe the company has no growth opportunities or
is in retreat, an IPO is unlikely to be successful.

Yet here is a company that consummated its IPO only a month ago and now is
firing a quarter of its employees!

~~~
forthefuture
From what I understand of the last 15 years, IPOs are now for cashing out when
you've manufactured a solid enough filing to convince normal people that
you're worth what the 10 VCs who gave you money say you're worth.

No company IPOs if they don't absolutely have to. It's like conceding that you
can't make enough profit privately to recoup your investment on any kind of
reasonable timescale.

~~~
ChuckMcM
In theory that can't be true. To IPO you don't need to convince "normal
people" to IPO you need to convince institutional investors (those that run
funds that are called on to fund retirement payouts, people who manage
university endowments etc) on a road show that investing in your company will
be a 'good thing' because the company is growing. The S-1 and prospectus
should tell you all about the risks in clear detail and what is and is not
known about the market. These people are not 'normal' people in that they
analyze investment opportunities all the time. They usually ask detailed
questions and want detailed answers. Usually a representative from the
independent accounting firm that audited your financials is along to answer
questions as well as the company's CFO to put the best possible spin on it.

These investors are not going to buy your initial stock and then turn around
and dump it because that would kill the value of any stock. Instead they have
to believe that they can buy your stock and hold it for 12 - 36 months and it
will become more valuable so that if they chose to they could sell it into the
market over enough months to not disrupt the price and make a return on the
money they invested. They need that return because the people who pay them to
manage the fund demand a certain standard of performance or they get fired.

If the goal was to just 'cash out' you have to convince all of these people
that you're not really going to cash out in order for them to buy into your
IPO. That is hard to do with dozens of new investors.

~~~
FLUX-YOU
I'm pretty sure underwriting and IPO standards have nose-dived:

[http://www.rollingstone.com/politics/news/the-great-
american...](http://www.rollingstone.com/politics/news/the-great-american-
bubble-machine-20100405)

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beager
From the article, they purport to be gunning to automate the function of most
of the folks who will be cut, but whether the cuts are based on some dire
condition of Blue Apron or are just part of getting more efficient is
obfuscated by the site move and clever explaining.

More to the point in the comments here about Blue Apron and other
underperforming IPOs, and the sense of IPOs being cash-out schemes for VCs and
founders: Is there a growing climate of such IPOs that would elicit a feeling
that tech IPOs are a means to extract money from the public/an exchange by
IPO'ing high and letting the share price slide to something real?

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wonder_bread
Title is absurdly click bait once you actually read a couple of articles about
what they are actually doing

