Dive Brief:

• Olo is laying off 81 employees, or 11% of its workforce, CEO Noah Glass said in a message to the company’s employees on Wednesday.
• The layoffs at the digital ordering and restaurant software company are part of a broader “strategic reorganization that includes the addition of a Chief Operating Officer,” Glass said. Olo has already appointed Joanna Lambert as COO, effective July 5, according to an 8-K filed with Securities and Exchange Commission.
• Restaurant tech layoffs have continued in the past months, with Grubhub laying off 400 corporate employees earlier this week, and virtual brand platform Nextbite laying off an unknown number of workers shortly before selling itself piecemeal to UrbanPiper and Sam Nazarian.

Dive Insight:

After buying Wisely in 2021 Olo reorganized its staff into a series of “Business Units,” Glass said. These created some unspecified complexity and redundancies. As part of the reorganization accompanying the layoffs, Glass noted, “we are aligning our technology and product team structures around three customer-centric product suites: Order, Pay, and Engage.”

Lambert joins the company to help it oversee the strategy and growth of the aforementioned customer-centric suites. Lambert previously the worked as a strategic advisor at Yahoo, according to her LinkedIn. Before that role, Lambert worked as senior EVP, president and general manager for Yahoo Consumer Business.

Prior to Yahoo, and of particular import according to Glass, Lambert previously held leadership positions at Venmo, Paypal and American Express, giving her vital experience in the payments space as Olo looks to expand its Olo Pay offerings.

Among the company’s ongoing challenges is that its losses have continued to grow since it went public in 2021. In 2022, the company reported a net loss $46 million dollars, a modest increase over its 2021 net losses, which were $42.3 million, according to its most recent 10-K, driving its accumulated deficit over $157 million. The company’s losses continued to grow, reaching $13.7 million in Q1 2023, compared to $11.5 million in the same period in 2022, according to its latest quarterly report. The accelerating losses in Q1 2023 were driven primarily by increased R&D and marketing costs, which outstripped revenue growth.

In the risks section of its 10-K, the company cautioned, “we have a history of losses and we may be unable to achieve or sustain profitability,” citing increased sales, marketing and R&D costs as long-term factors hurting profitability.

While layoffs related to the pandemic initially seemed restricted to the restaurant tech sector last year, with prominent layoffs at ChowNow, Reef, Nextbite and DoorDash, and the quiet implosion of hotel ghost kitchen company Butler Hospitality, the job cuts have spread to the QSR and fast casual segments of late. Chipotle let go of 25 corporate employees this month, Wendy’s hinted at possible layoffs in January, and McDonald’s temporarily shuttered its U.S. corporate offices in April to facilitate an unspecified number of job cuts. Olo’s layoffs, though conditioned by the company’s mounting losses, could signal further trouble for restaurant tech workers.