HelloFresh implements mass layoffs, closing Bay Area warehouse
HelloFresh, a Berlin-based company once considered the nation’s largest meal kit provider, has announced plans to close its massive Bay Area manufacturing facility at the end of the year and will lay off more than 600 employees.
A letter to the California Employment Development Department, dated Oct. 10, relayed the company’s decision to close the facility permanently on Dec. 11, which will result in the layoff of 611 employees, including production workers, managers and maintenance personnel, according to reports by the San Francisco Business Times and MarketWatch. HelloFresh was required to notify its employees 60 days before the closure under the California WARN (Worker Adjustment and Retraining Notification) Act.
A spokesperson for HelloFresh did not immediately respond to SFGATE̵[ads1]7;s request for comment. However, a representative told the San Francisco Business Times that the company’s lease was set to expire in early 2023 and chose not to extend it after a “comprehensive analysis” of the manufacturing network.
“Richmond is one of the oldest buildings in the US network and has one of the smallest footprints, an inefficient layout and outdated cooling systems,” the statement said. “Given the outdated condition of the facility, HelloFresh will focus its efforts on its newer, more efficient sites and move production of the EveryPlate to our other distribution centers.”
The 109,594-square-foot warehouse at 2041 Factory Street in Richmond is currently listed for lease on PropertyShark. It was built in 2001 and leased by the company in 2015.
HelloFresh’s 109,594-square-foot warehouse at 2041 Factory Street in Richmond.
Google Street View“The decision not to extend the lease is not a reflection of the performance of the local teams and we are grateful for their contribution,” a spokesperson for HelloFresh told the Richmond Standard.
In 2020, HelloFresh reported a 68.9% increase in active customers, but workers at the East Bay factory kitchen attempted to form a union the following year amid the company’s growing demand exacerbated by the pandemic, alleging that it led to unsafe working conditions. Low wages, alleged high injury rates and a major COVID outbreak at the facility that resulted in the death of one employee were among the concerns highlighted by staff.
Although it would have been the first union in the meal kit industry, HelloFresh workers ultimately voted against joining UNITE HERE. Some employees claimed that their attempts to organize were met with retaliation by the company, and the Guardian reported that HelloFresh was spending thousands of dollars a day to bring in anti-union consultants during the campaign. (A HelloFresh spokesperson said at the time that it “believes that the decision to be represented by a union or not is an important one, and we respect each employee’s right to choose or decline union membership.”)
This year, the company’s demand has seen a sharp decline, with market share plunging more than 68%, as Business Insider reported. It was worth nearly $20 billion in August 2021.
