Berlin-based Infarm to downsize business in the Netherlands, may lay off over half its workforce

Berlin-based Infarm, an agritech startup that builds and distributes efficient vertical farms throughout cities, announced on Monday, November 28, that it is making a strategic shift to accelerate its drive towards profitability.

The company is looking to reduce its manufacturing sites and indicates that more than half of the staff, or about 500 people, will have to depart the organisation. The exact numbers are still to be determined.

“We are focusing on Growing Centres where we have a clear path to profitability in 2023 and consolidating those where this cannot be achieved in the near term,” co-founders Erez Galonska, Osnat Michaeli, and Guy Galonska mention in a blog post.

How will the firm address coworkers?

According to Infarm, all those who will be leaving the company will be compensated for their notice period and receive a severance payment. Those who will be placed on notice will be supported by their manager and HR representative throughout the transition.

“We will communicate with colleagues as quickly as possible while recognising that we are a distributed team across many countries and locations. We are proud of what we have built together as a team and of the exceptionally talented people who joined our mission – saying goodbye to so many of you is extremely painful. We want to thank you for your unique contribution over the months and years,” says the company.

As for employees whose roles will remain at Infarm, the company will provide more context through a meeting.

Why is the layoff necessary?

The company says that important market conditions that directly influence Infarm’s business and operations have gotten worse. The company is under a lot of additional stress as a result of rising energy costs (which have doubled throughout Europe), which have a significant influence on the cost of production in the impacted areas. Inflation, problems in the supply chain, and growing material costs are further factors.

In a statement, Inform co-founders say, “As you know, we have already been adjusting our operations this year, including consolidating production sites, inStore farm clusters, and reducing our workforce. However, these measures assumed a quick market recovery, and we must admit that our assessment was too optimistic. We take full responsibility for that. Based on the data we have today, we are forecasting slower growth caused by a significant downturn. We grew our teams to support a global growth strategy, but today, it is clear that a consolidation and focused growth mindset is required to overcome the challenges.”

Infarm is looking to adopt a stricter road to profitability in the upcoming 18 months if they are to attain financial independence and ensure long-term corporate stability.

Infarm’s revised plan

The Berlin-based company is consolidating its farming capacity of growing centres in key markets, including Frankfurt (Germany), Copenhagen (Denmark), and Toronto (Canada). In these markets, the company claims to have established strong retailer relationships and secured contracts of significant volume and can achieve profitability in 2023.

Additionally, in order to service the tri-state region, the company will also launch its Growing Centre in Baltimore (Maryland, US). However, the company is proposing to downsize its operations in the UK, France and the Netherlands. Infarm’s InStore farming network will also be optimised for critical clusters. The company is also evaluating its business in Japan.

Moreover, by giving priority to its high-yield industrial-scale agricultural units (ACREs), the company will continue to cut back on resource consumption and production costs, giving customers access to more affordable and sustainably produced food. With record-breaking harvest performance of more than 95 per cent, Infarm have already reached yields of more than 100 kg/m2/year for herbs and 150 kg/m2/year for lettuce. The company will also move its modular ACRE farming units to the newly identified primary markets.

The co-founders mention that “As leaders, we will spend time reflecting and learning how to move forward with greater focus and conviction and to execute our new plan successfully. We truly believe that vertical farming has the potential to provide food security in a warming world beset by climate shocks and instability and we, as Infarm, have a critical role to play in the future of food.”

Brief about Infarm

Founded in 2013 by Osnat Michaeli and the brothers Erez and Guy Galonska, Infarm aims to share the goodness of self-grown produce with everyone. The company has developed a smart modular farming system that allows the distribution of vertical farms throughout the urban environment, growing fresh produce in practically any available space and fulfilling practically any market demand. 

The company is helping cities become self-sufficient in their food production while improving the safety, quality, and environmental footprint of food.

With a team of more than 1,000 people globally, Infarm has partnered with more than 30 major food retailers, including Aldi Süd, Amazon Fresh, Auchan, Casino, E.Leclerc, Edeka, and Empire Company Ltd (Safeway, Sobeys, ThriftyFoods), among others.