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Amid faltering demand for at-home meal kits, Germany-based HelloFresh is shutting down a Newnan fulfillment center it opened during the pandemic, cutting 727 jobs.
The company confirmed the cost-cutting move after submitting a required public notice to the Georgia Department of Labor under the name Grocery E-Delivery Services Inc. on May 8. The layoffs will be effective on July 10.
The Berlin-based firm announced the facility in August 2020, promising the creation of 750 jobs as the market surged along with lockdowns in the U.S.
Today, it faces a moderated demand and an uncertain future. Ongoing orders will be fulfilled from other facilities across the U.S. as the company optimizes its network, according to a statement from a public relations official cited by the Newnan Times-Herald.
The move comes as the company posted nearly €2.1 billion in revenue (about $2.26 billion) in the first quarter of 2024, about two-thirds of it coming from North America, with a razor-thin margin of €16.8 million (0.8 percent) in earnings before taxes. HelloFresh stock has fallen to €5.61 per share from a recent peak of about €34 less than a year ago. The shutdown also comes as the company’s Factor brand has become one of the market leaders in the ready-to-eat category of meals (those simply heated up rather than cooked from packaged ingredients).
This move and openings in new European markets have been “more than offsetting the decline in meal kit revenues,” CEO Dominik Richter said in a news release. Newnan, it seems, simply happened to be on the wrong side of the company’s expansion strategy.
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