Boston-based restaurant management platform Toast recently announced that it has laid off about half of its staff as the coronavirus pandemic forces restaurant closure globally.
Citing restaurant sales decline as the reason, CEO of Toast Chris Comparato through a company blog said, “During the month of March, as a result of necessary social distancing and government-mandated closures, restaurant sales declined by 80 percent in most cities. This is a massive disruption that hit the industry virtually overnight. Many restaurants that have temporarily closed may never reopen.”
He also added, “Toast did all it could to protect the health of the company. It froze hiring, pulled back offers, and halted merit pay increases.”
The leadership team of the company is also taking a pay cut to cope with the crisis. “As a leadership team, we will reduce our pay across the board,” Comparato said. “But with limited visibility into how quickly the industry may recover, and facing slower than anticipated growth, we now find ourselves in the unenviable position of reducing our head count.”
Founded in 2012, Toast helps new and upscale restaurants update their technology. Toast provides POS technology that helps eateries maneuver from dine-in to takeout.
The startup had recently raised $400million in a funding round led by Bessemer Venture Partners in February and revenue nearly doubled in 2019. It is valued at almost $5 billion.
“There is no playbook for navigating a global pandemic, but at Toast we will double down on our effort to support our community and become the leading platform for restaurants of all sizes,” Comparato wrote. “We will continue to invest in our team, our platform, and — most importantly — our customer community.”
Layoffs have now become the last resort for new age startups to sustain their businesses. Lately, the talent ecosystem has been witnessing several layoffs across industries despite the government and unions asking organizations to not fire anyone in this unprecedented crisis.
The International Labour Organization has estimated that the pandemic could cost a minimum of 2.5mn jobs worldwide. On the other hand, several economists have also said that the coronavirus outbreak is leading the global economy to a recession worse than the 2008 financial crisis.
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