German vertical farming startup Infarm today confirmed it will make redundancies that will cover up to 50% of its 500-person workforce.
The lay-offs come at an awful time for startups generally. Widespread job losses are expected due to a dangerous brew for young business, driven in part by the fall-out from supply bottlenecks, cost inflation and an ongoing war on the European continent.
Headquartered in Berlin, Infarm was formed in 2013 by a founding trio (Osnat Michaeli, and brothers duo Guy and Erez Galonska,) who had the idea of taking a 1950s car trailer and converting it into an indoor farm.
The past nine years have seen Infarm raise $604.5 million in funding. Its market concept has been proven with modular IoT devices and machine learning that can pinpoint the correct conditions for growing indoor crops in urban environments.
Vertical farms are regarded as a key innovation in the circular economy, enabling urban farmers to grow produce right next door to their customers and reducing emissions caused by farm transport.
Infarm's indoor farming modular kit and remote crop monitoring service is now being sold from 11 countries and over 1,850 retail stores. Unfortunately, it is still to turn a profit.
Following the redundancies, the company will aim to become financially self-sustaining within 18 months, helped by a far leaner wage bill and a renewed focus on its industrial-scale "growing centres", seen as offering more revenue potential.
In June, for instance, Infarm launched a 10,000 square metre indoor farm in Bedford, UK. The facility has space for up to 40 of Infarm's cloud-connected vertical farming terminals, enough to grow more than 500,000 plants annually.
The UK facility is now in line for "downsizing", along with Infarm's Dutch and French growing centres.
Post-consolidation, Infarm will focus on three facilities in Frankfurt, Copenhagen and Toronto, Canada. In addition, a fourth centre is set to open in the US in Baltimore and Infarm has also put its Japanese operations under review.
The precise number of employees that will be leaving Infarm is still to be confirmed. It's believed to have been the last option on the table.
Infarm has already been looking to make savings by consolidating production sites and farm clusters and making early redundancies. However, the need for widescale staff cuts soon became clear.
"These measures assumed a quick market recovery," Infarm said in its press statement, "We must admit that our assessment was too optimistic.
"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."