Technology

Toast lays off 550 employees in restructuring

CEO Aman Narang said the company grew too quickly as it raced to meet demand. The cuts are intended to lower its operating costs.
Toast
The layoffs affected about 10% of Toast's workforce. | Photo courtesy of Toast

Restaurant tech supplier Toast on Thursday laid off 550 workers, or about 10% of its staff, in a restructuring intended to lower operating costs.

In a call with analysts, CEO Aman Narang said the cuts were “the difficult but right decision.” 

“It has become clear we grew too quickly in some areas” to keep up with demand, he said. Toast’s customer base has doubled since the company went public in September 2021 to about 106,000 restaurant locations.

Most of the layoffs affected non-customer-facing staff, Narang said. 

The cuts came after a year of strong top-line growth for the Boston-based company. Total revenue was $3.9 billion, a 42% year-over-year increase. But Toast also reported a $246 million net loss for the year, which was driven by a $287 million loss from operations. The company’s stock price has fallen 65% since its IPO.

Toast estimated the restructuring will cost it $45 million to $55 million, and will deliver $100 million in annual savings. It plans to reinvest the savings in growth.

It also expects to continue narrowing its operating losses, with an eye on turning profitable there in the first half of 2025, said CFO Elena Gomez.

Toast generates revenue via payment processing fees, software subscriptions and hardware sales. Its products include a cloud-based POS system, handheld server tablets and back-office software. Its customers are mainly small and medium-sized restaurants, but it has begun to go after larger chains as well. On Thursday, it said 500-unit Caribou Coffee will start using its technology.

The job cuts Thursday added to a wave of tech layoffs that began in 2023 and have continued this year. Like Toast, many tech firms grew quickly during the pandemic and are now buckling down to focus on profits.

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