Most recently, the $ 5 billion restaurant management platform Toast has joined numerous startups firing employees due to the economic impact of the COVID-19 pandemic. According to a blog post by Toasts CEO Chris Comparato, Toast has cut the number of its employees by 50% through layoffs and vacations. It also reduced executive pay across the board, freezing recruitment, stopping bonuses and withdrawing offers.
The company’s flagship helps restaurants process payments and process orders using a mix of hardware and software. Think of handheld order blocks, self-service kiosks and display systems for kitchens. It also connects companies with food delivery services like Grubhub.
Toast is in the spotlight on the bridge between two industries, whether good or bad: restaurants and fintech. However, the restaurants were hit hard because the restaurants had to be closed due to government mandates or simply had to promote social distancing. As a result, fintech companies that help restaurants work better and rely on pedestrian traffic see less transaction volume.
In the blog post, Comparato cited how the restaurant revenue in March was largely a success, which was of course due to toast operations.
“With limited insight into how quickly the industry can recover and slower-than-expected growth, we’re now in an unenviable position to reduce our workforce,” he wrote. Before the pandemic, Toast 2019 sales increased 109%. In an interview with Crunchbase News in February, CFO Tim Barash said the company’s goal over the next few years is to go public.
The dismissed Toast employees were offered a “severance package, benefits, mental health support, and an expanded window where they could purchase vested stock options,” the blog post said. Toast is also developing a program that allows layoffs or those on leave to search for new roles. This move mimics other efforts we’ve seen in the startup world.
Toast’s investors include TCV, Tiger Global Management, Bessemer Venture Partners and T. Rowe Price Associates.