Beyond Meat is cutting 19% of its non-production workforce after a weaker-than-expected third quarter.
The plant-based meat company said Thursday that the reduction of about 65 employees is part of a broader corporate review. The company is also considering exiting some product lines, changing pricing, shifting its manufacturing and restructuring its Chinese operations.
Beyond Meat’s shares rose 20% in afternoon trading Thursday.
“We anticipated a modest return to growth in the third quarter of 2023 that did not occur,” Beyond Meat President and CEO Ethan Brown said in a statement.
U.S. demand for plant-based meat has plummeted this year. U.S. retail dollar sales of fresh meat alternatives, like sausage and burgers, were down 21.5% this year through Oct. 8, according to Circana, a market research firm. Frozen plant-based meat sales, including items like tenders and nuggets, were down 6%.
Brown has said that plant-based meat sales were hurt by high inflation, which sent some shoppers back to cheaper animal meats. Plant-based meat is also fighting perceptions that it’s overly processed and unhealthy, stoked in part by ads released by rival food companies.
Beyond Meat plans to release its third-quarter earnings on Nov. 8. In the meantime, it said it expects revenue of $75 million for the July-September period. That would be 8.5% lower than the same period a year ago.
Beyond Meat also said it now expects full-year net revenue in the range of $330 million to $340 million, which would be 19% to 21% lower than the previous year. Wall Street had expected full-year sales of $365 million, according to analysts polled by FactSet.
The layoffs aren’t the first for Beyond Meat. Last year, it laid off around 240 people in multiple rounds of cuts, citing pressure from inflation and intensifying competition.
The El Segundo, California, company said it saw weaker sales in U.S. retail and food service and lower-than-expected return on promotional programs. The company recently launched U.S. ads that try to counter negative perceptions.
Beyond Meat has seen a better reception for its products in Europe, where its burgers and chicken nuggets are featured on McDonald’s menus. McDonald’s has tested Beyond Meat’s products in the U.S. but hasn’t added them to its permanent menu.