Dive Brief:
- Olo laid off about 9% of its workforce last week, according to a Securities and Exchange filing from the tech company.
- Noah Glass, the company’s CEO, wrote in a letter to employees that the move was necessary to “sharpen our focus and move toward more balanced growth.”
- Olo reached positive net income in recent quarters, thanks to growing revenue. In Q2 2024, its revenue rose 27% to $70 million from $55 million in the year-ago period, according to its most recent 10-Q.
Dive Insight:
Glass, in his comments to employees, acknowledged that Olo was profitable, but said the company needed to “drive efficiencies.” Olo did not directly specify, either in Glass’ letter or in the company’s 8-K, which divisions of its business would be most impacted. However, a close reading indicates its research and development may be affected.
Glass said Olo, following the cuts, “will execute a more streamlined vision for product innovation, building upon our current solutions.”
Olo’s research and development costs fell modestly from Q2 2023 to Q2 2024, with costs dropping from $18.3 million to roughly $17 million. General administrative expenses decreased by about $10 million year over year. The company’s cost of sales and marketing was the only portion of its operating expenses to grow from the year-ago period, according to the 10-Q, rising about $1.1 million to $13.3 million.
An Olo spokesperson, in an email to Restaurant Dive, said the cuts on the whole impacted fewer than 70 workers. The company will pay 10 weeks of severance plus a week for each year of tenure, and three months of “company-paid COBRA health insurance for them and their dependents,” Glass wrote in his letter. The cost of severance will amount to between $2.2 million and $2.6 million, according to the SEC filing.
Last year, Olo laid off about 11% of its workforce amid broader job cuts in the restaurant tech sector. Wingstop, a major customer, dropped Olo’s digital ordering platform in late 2023 — the brand still works with Olo on digital ordering outside the U.S. and Olo’s voice ordering technology at U.S. company stores. But Glass said on Olo’s most recent earnings call that other restaurant brands that ended partnerships to try to build their own tech have returned to Olo.
“We’re especially excited to welcome back &pizza, who returned to Olo after leaving to build their own ordering solution,” Glass said. “The trend we’ve seen since our IPO is that more brands migrate from in-house tech and to the Olo platform.”
Correction: A previous version of this article misstated the changes in Olo’s relationship with Wingstop.
