Meal-kit company Chef'd suddenly shut down and laid off its hundreds of employees
- Chef'd, a major meal-kit company, ceased operations on Monday.
- The company's more than 350 workers have been laid off, four sources with knowledge of the situation told Business Insider.
- The news comes as a surprise, as it is soon after a series of major announcements for Chef'd, which has raised roughly $45 million in funding over the last year.
Chef'd, a major meal-kit company, suddenly shut down services on Monday.
As of Tuesday, customers can no longer place orders on the meal-kit service's website. According to four sources with knowledge of the situation and an internal email viewed by Business Insider, the company alerted employees that it was immediately ceasing operations on Monday.
Chef'd's more than 350 workers - most of whom worked at the company's warehouses in Brooklyn, New York, and California - were told that the company was shutting down late on Monday.
"We have had some unexpected circumstances with the funding for the business," founder and CEO Kyle Ransford said in an email to employees on Monday evening.
"Due to setbacks with financing, unfortunately, we are ceasing operations for all employees, effective today, July 16, 2018," the email continues. "If we had been successful with these funding efforts, this difficult decision would have been avoided."
Most employees were alerted to the news prior to the email, during a 4 p.m. PST company-wide conference call, former warehouse workers told Business Insider. Miguel Gonzalez, who worked as a sanitation supervisor at Chef'd's Pico Rivera, California, location said that all employees were sent home immediately following the call, with the knowledge they no longer had jobs at the meal-kit startup.
"There were some tears," Gonzalez said.
According to the email, workers will receive wages through their last day of work, as well as accrued vacation days.
"I want to personally thank each of you," Ransford said in the Monday email. "It was an amazing run and while we didn't get to where we wanted to go, I hope you each take something away from this experience that will help you in the future. I will miss you and I will miss Chef'd."
Chef'd declined to comment following Business Insider's request for more details.
The news comes as a surprise, as it comes after a series of major announcements from Chef'd.
Last month, Chef'd announced it would sell its meal kits in 30 Duane Reade and Walgreens locations in New York. In late May, Campbell's announced it had made a $10 million investment in the company, following a $35 million round of investments in 2017 from Campbell's and pork producer Smithfield Foods. Also in May, Chef'd announced it would be partnering with Byte Foods to stock meal kits in the company's smart fridges.
Chef'd, which launched in April 2015, made its name as the biggest meal-kit service that didn't rely on a subscription model, like HelloFresh and Blue Apron. The company employed roughly 400 workers, primarily in warehouses in Brooklyn, New York, and California. Its headquarters was in El Segundo, California.
While the meal-kit business as a whole is trending, individual companies have hit some rough patches recently, with a number of competitors going out of business. With more companies creating meal kits of their own and Amazon looming large in the food industry thanks to its Whole Foods acquisition, the competition is stiff.
You can read Ransford's full email below:
We have had some unexpected circumstances with the funding for the business. Due to setbacks with financing, unfortunately, we are ceasing operations for all employees, effective today, July 16, 2018. If we had been successful with these funding efforts, this difficult decision would have been avoided.
Everyone will receive wages through his/her last day of work, as well as any accrued vacation (as applicable). Eligible employees will have benefits through July 31, 2018.
I want to personally thank each of you. It was an amazing run and while we didn't get to where we wanted to go, I hope you each take something away from this experience that will help you in the future. I will miss you and I will miss Chef'd.
Best of luck and please be in touch,
Kyle