A Food Company Now Announces A Surprising Wave of Layoffs

July 11, 2024

A food company now announces a surprising wave of layoffs following several industry challenges, including lack of capital.

Upside Foods has initiated a fresh round of layoffs, according to a statement sent to Food Dive.

The company is focused on its “next chapter” of scale and commercialization, a spokesperson said in the statement.

As a result, to “stay agile in the face of an uncertain macroenvironment, we made adjustments to certain programs and reduced some positions.

We’re deeply grateful for the hard work and commitment of our departing team members and remain focused on bringing cultivated meat at scale to the world,” said the spokesperson.

The company went through a previous round of layoffs earlier this year after it decided to pause operations of its new production plant in Chicago.

The cultivated meat industry, which was officially able to enter the U.S. market in June 2023, has gone through a plethora of challenges lately, including pushback from state lawmakers and a lack of access to capital.

In an email sent to employees, Upside CEO Uma Valeti wrote that 26 employees would be let go from the company and that executive and leadership teams would be restructured to “reduce top-heavy structures,” according to a report from Wired.

“Our focus must now narrow to a tighter set of priorities that pave the way for our product launches in the next two years,” Valeti wrote in the email.

“We need to deliver on the work that remains, especially on critical milestones that are yet to be hit or are delayed.”

The company confimed to Food Dive that is working to expand production at its California plant, known as “Epic.”

“As part of this expansion, we will be adding larger cultivators that will demonstrate our ability to transfer our process into successively larger and more efficient scales while maintaining the taste, quality, and safety that we have been able to consistently achieve at the 2KL scale,” the spokesperson wrote.

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Other Economy News Today

Applications for unemployment benefits now surge to new highs, a sign that the white-hot labor market is starting to cool off.

First-time applications for unemployment benefits rose last week to 231,000, the highest level since August, per CNN.

Thursday’s data also showed that the number of continuing claims, or applications from people who have filed for unemployment for at least one week, was 1.78 million.

That’s an increase of 17,000 from the prior week, according to the Bureau of Labor Statistics.

The latest numbers come less than a week after the monthly jobs report showed the US economy added just 175,000 positions in April, less than economists expected and a steep drop-off from prior months.

US employers have now added an average of 245,500 jobs per month, versus 2023’s 251,000-per-month average.

Still, hiring remains strong. Although the unemployment rate ticked up to 3.9% last month, it’s the 27th consecutive month that the jobless rate has held under 4%, matching a streak last seen in the late 1960s.

Weekly jobless claims data tends to be volatile but, while one week’s worth of data “does not a trend make,” said Chris Rupkey, chief economist at Fwdbonds.

“We can no longer be sure that calm seas lie ahead for the US economy if today’s weekly jobless claims are any indication.”

“Company layoffs are picking up, hinting at caution on the part of companies as they weigh the outlook for the second half of the year,” he wrote in a note Thursday.

The Federal Reserve has been battling inflation by raising its key lending rate in the hopes of slowing the economy.

While the labor market has so far resisted those efforts, remaining white hot for the past 18 months despite 11 rate hikes from the central bank, Fed Chair Jerome Powell said last week that demand has “cooled from its extremely high level of a couple of years ago.”

Ian Shepherdson at Pantheon Economics said in a note Thursday: “We’d need to see at least a month of elevated readings to convince us that the trend really has turned.”

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Also Read: A Giant Company Now Announces Unexpected Layoffs in Virginia

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