Beyond Meat axes 200 jobs, reduces revenue outlook

Beyond Meat reduces its current workforce by 200 employees, representing approximately 19 per cent of the company’s total global workforce.

The company estimates it will incur one-time cash charges of approximately $4 million in connection with the reduction in force, primarily consisting of notice period and severance payments, employee benefits, and related costs. It expects the majority of these charges will be incurred in the fourth quarter of 2022, and that the reduction in force will be complete by the end of 2022, subject to local law and consultation requirements.

While the company continues to review the drivers behind recent performance, it believes it has been negatively impacted by ongoing softness in the plant-based meat category overall, especially in the refrigerated subsegment, and by the impact of increased competition. Inflation is believed to be an underlying factor exerting pressure on the category as consumers trade down into cheaper forms of protein, including animal meat. Additionally, the company believes it was negatively impacted by decisions made by distributors and customers, such as changes in inventory levels and postponed or cancelled promotions. Delayed and/or cancelled product promotions, programs and introductions relative to the company’s plans also negatively impacted management’s revenue outlook. The company expects gross margin to be negatively impacted as a result of the reduced revenue outlook.

The company is also reducing its full year revenue outlook. Based upon preliminary results, the company now expects third quarter 2022 net revenues of approximately $82 million, a decrease of approximately 23 per cent versus the prior-year period. Full year 2022 net revenues are expected to be in the range of approximately $400 million to $425 million, representing a decrease of approximately 14 to nine per cent compared to the full year 2021. This compares to the company’s previous expectation of full year 2022 net revenues in the range of $470 million to $520 million.

President and CEO Ethan Brown commented, “Beyond Meat is implementing measures to drive more sustainable growth, emphasizing the achievement of cash flow positive operations within the second half of 2023. While we believe the current headwinds facing our business and category—including record inflation—are transient, our mission, brand, and long-term opportunity endure. To manage through the current environment and realize the opportunity ahead, we are significantly reducing expenses and sharpening our focus on a set of key growth priorities.”

Brown added, “We continue to make strong progress against the levers of mainstream adoption—taste, health, and price–and are steadfastly advancing key strategic partnerships. The global climate crisis underway dictates greater, not less, urgency in the adoption of all solutions of which ours is among the most immediate and powerful. We believe our decision to reduce personnel and expenses throughout the company, including our leadership group, reflects an appropriate right-sizing of our organization given current economic conditions. We remain confident in our ability to deliver on the long-term growth and impact expected from our global brand.”