Misfits Market is laying off hundreds as it prepares to close 3 distribution facilities

“Ugly” produce and shelf-stable food delivery company Misfits Market saw rapid growth amid the early days of the pandemic, but with a recent acquisition, a consolidation strategy has led the company to lay off hundreds of its workers.

Three of its food distribution centers, including one just over the Ben Franklin Bridge in Delanco, New Jersey, are closing, company spokesperson Ken Shuman confirmed to Technical.ly. The two other facilities are in Salt Lake City and Dallas. The South Jersey center employed 446 employees; 649 employees total were affected by the closures. The Delanco facility is slated to close April 8, Shuman said.

Shuman said the move comes after the company acquired Imperfect Foods in 2022. In September, Misfits Market said the move would allow the brands to “deliver a better, more sustainable grocery experience” and reach $1 billion in sales and profitability by 2024. Following the acquisition, Misfits Market conceived a consolidation plan around a network of smaller fulfillment centers including Imperfect Foods’ driver network. It reduces the need for large, centralized facilities, like the more than 100,000-square-foot Delanco one, Shuman said.

“As tough as this decision was, we believe this will positively impact our customer experience and help us streamline our operations, better leverage our capacity and reduce costs and waste,” the spokesperson said. 

Shuman acknowledged that the layoffs are tough in this region, in particular, noting the company’s Philly-area roots. The 2018-founded company started in North Philadelphia, and moved over the bridge in 2020 when it needed more space for a local distribution center. The company raised large venture capital rounds in quick succession — a $16.5 million Series A in 2019, an $85 million Series B in 2020, a $200 million Series C in 2021, and a $225 million Series C-1 just a few months later in 2021 with a $2 billion valuation.

Misfits Market stated its intent to acquire Imperfect Foods in Q3 of last year, and the deal closed at the end of October. The competitor was founded in 2015, has brought in a total of $229 million and employed about 1,200 people before the deal.

The closing of these three facilities have led to a 33% reduction in the company’s workforce, but Shuman said the company plans to add “hundreds” of jobs across its five other facilities “as we shift fulfillment and continue to grow.”

The news comes in a year full of tech and tech-adjacent layoffs from venture-backed companies and Big Tech giants alike. It also follows several rounds of layoffs totaling at least 2,000 employees from Callowhill-headquartered instant needs delivery giant Gopuff, which in 2022 raised at least $1.5 billion.