Beyond Meat Cuts 19% of Workforce As Sales Lag
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In an expected move as sales continue to miss targets, U.S.-based Beyond Meat has announced layoffs affecting 200 employees including their recently suspended COO.
The layoffs at Beyond Meat include Deanna Jurgens, chief growth officer and North America president, and chief operating officer Doug Ramsey, who was suspended last month following his arrest and battery charges after attacking a man after a University of Arkansas football game. Days prior to the layoffs, chief financial officer Philip Hardin informed the company he was stepping down “to pursue another opportunity.”
Beyond Meat says the layoffs are “based on cost-reduction initiatives intended to reduce operating expenses…and target cash flow positive operations within the second half of 2023.” Its shares dropped 87 percent to a 52-week low of $12.76. The last trading saw it up to $13.95, bringing the company’s market value to under $900 million.
Beyond Meat earnings projections
The layoffs follow recent adjustments to earnings projections, which are 14 to nine percent under 2021’s earnings. Beyond Meat’s initial projections expected revenue between $470 million and $520 million, but the company dropped that to $400 million to $425 million earlier this month. Third-quarter revenue is expected to be down 23 percent over last year, the company said.
In August, the company reported net revenues of $147 million for the second quarter of 2022, which was down 1.6 percent compared to the same period last year.
The vegan meat brand took another recent hit when McDonald’s announced it was pulling a U.S. test of the McPlant burger, made with Beyond Meat patties, from more than 600 stores.
The news comes as Impossible Foods, Beyond Meat’s chief U.S. rival, announced it was laying off six percent of its staff. That move though came as part of restructuring and eliminating redundancy, CEO Peter McGuiness said in a memo to staff, not missed forecasts.
Impossible Foods maintains steady growth and good cash positions, growing at 65 to 70 percent, as it sees global expansion for existing products and new product offerings. The company recently announced plans to launch a whole-cut filet mignon.
“[W]e still need to prioritize the projects and initiatives that will best fuel our business and mission as we prepare for our next phase of growth,” McGuinness said, adding that the layoffs are part of the company’s planned “hypergrowth.”
Vegan meat demand
Sales for refrigerated meat alternatives at U.S. supermarkets are down overall, dropping more than ten percent by volume for the 52 weeks ending September 4, 2022, according to Information Resources Inc. It says higher prices are leading the decline as inflation takes its toll.
But another recent report says this downturn is part of a natural “S-curve” growth trajectory seen in a number of other categories including electronics and pharmaceuticals.
“History is littered with examples of technological products and services that were adopted with the famous ‘S‑curve,’” writes Dr, Catherine Tubb, Director of Research at Synthesis Capital. “This adoption shape is ubiquitous, with products as diverse as refrigerators, cars, color TVs, and smartphones all showing that same familiar S-shaped curve.”
Images courtesy Beyond Meat.