Technology company Reef is laying off 5% of its workforce as it narrows its focus on profitability amid a stumbling economy.
That will entail a doubling down on its strongest businesses—ghost kitchens and parking—and a paring back of other pursuits, CEO Ari Ojalvo wrote in a letter to employees that was shared with Restaurant Business.
The shift in priorities that began earlier this year “proved to be timely and necessary as we observe the current state of the economy,” Ojalvo wrote, noting rising inflation. “More precisely, the sectors in which we operate have seen severe disruptions and significant layoffs.
“To adapt to this environment, it is with a heavy heart that we are parting ways with 5% of our global workforce.”
The layoffs will affect 750 workers, according to The Information, which first published the news.
Founded in 2013 as a parking technology company, Reef owns or manages thousands of parking lots around the world. It has used that real estate as a launchpad for other businesses, including ghost kitchens. Many of its mobile, delivery-only food trailers are located in its parking lots.
Reef has also explored other uses for its lots, like health clinics, convenience stores and vertical farms. But those ventures will apparently fall to the wayside as it doubles down on kitchens.
The Miami-based company has grown rapidly behind a $700 million investment in 2020 that included contributions from SoftBank. Billing itself as the fastest-growing restaurant company in the world, it has licensing agreements with a number of restaurant chains, most notably Wendy’s, and had plans to open thousands of kitchens last year.
It has not yet met those lofty expectations, however. Reef’s kitchens have run into problems with health and permitting rules in some markets, and it has had to temporarily or permanently close some locations. One of its most high-profile partners, David Chang’s Fuku, left the platform and joined a different provider. Recent estimates put Reef’s global kitchen footprint at about 500 total brand locations; some of its kitchens serve multiple brands.
Despite the setbacks, the company has maintained that its kitchens are doing well and growing, though it is shifting its strategy to feature more brick-and-mortar locations. In January, it said it planned to launch 34 new brands in the first quarter.
It has also closed on a fresh round of funding that includes new and existing investors, according to a person close to the company who asked to remain anonymous.
Ojalvo said employees who are losing their jobs will be contacted “in the coming days” to discuss severance and transitional support.
“The values and capabilities that brought you to Reef helped it become the company it is today,” he wrote. “I want to thank you for sharing this time with us and know that we will continue to be your ally as you build your future.”
The news comes amid a wave layoffs at other tech startups, including Robinhood, Noom and Gopuff.
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