HelloFresh Conducts Mass Layoffs, Bay Area Warehouse Closures
HelloFresh, a Berlin-based company that was once considered the largest supplier of meal kits in the countryannounced plans to close its huge Bay Area production facility at the end of the year, and will subsequently lay off more than 600 employees.
A letter to the California Department of Employment Development, dated Oct. 10, relayed the company’s decision to permanently close the facility on Dec. 11, which will result in the layoff of 611 employees, including production associates, managers and maintenance staff, according to reports from San Francisco Business Times and MarketWatch. HelloFresh was required to notify its staff 60 days before closing California WARN (Worker Adjustment and Retraining Notice).
A spokesperson for HelloFresh did not immediately respond to SFGATE’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 decided not to renew it after an “extensive analysis” of its manufacturing network.
“Richmond is one of the oldest buildings in the US network and has one of the smallest footprints, an inefficient layout and antiquated cooling systems,” the statement said. “Given the facility’s aging condition, HelloFresh will focus its efforts on its newer, more efficient locations and shift production of EveryPlate to our other distribution centers.”
The 109,594-square-foot warehouse at 2041 Factory Street in Richmond is currently on the list for rent on PropertyShark. It was built in 2001, and the company leased it in 2015.
“The decision not to renew the lease is not a reflection of the performance of the local teams and we are grateful for their input,” a HelloFresh spokesperson said Richmond Standard.
In 2020, HelloFresh registered a 68.9% increase in the number of active customers, but workers at the East Bay kitchen factory tried to form a union next year amid the company’s growing demand exacerbated by the pandemic, saying it led to dangerous working conditions. Low wages, an alleged high injury rate, and a major factory outbreak of COVID that resulted death of one employee were among the concerns raised by staff.
Although it would have been the first union in the cutlery industry, HelloFresh workers ultimately voted against joining UNITE HERE. Some employees claimed that their attempts to organize were met with resistance retaliation by the company and the Guardian registered that HelloFresh spent 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 deciding whether or not to be represented by a union is an important decision, 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 shares falling by more than 68%, according to Business Insider registered. As of August 2021, it was worth nearly $20 billion.
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