Zume shutters Zume Pizza, will lay off 53% of employees

UPDATE, Jan. 9, 2019: Zume has shuttered its Zume Pizza division, but Zume Forward Mobile and Zume R&D will continue, Zume CEO and founder Alex Garden said in an email to employees shared with Restaurant Dive. Zume will increase its focus on Zume Source Packaging as part of its 2020 strategic goals and plans to expand facilities and manufacturing capabilities in the U.S., India and other global markets.

Dive Brief:

Zume is expected to layoff about 360 employees, or about half of its staff according to CNBC.
Despite the layoffs, the company plans to offer 100 new jobs in food packaging, which will be open to employees impacted by the job cuts.
This is another loss for SoftBank's Vision Fund. SoftBank-backed car rental platform Getaround cut about 150 workers earlier this week, and WeWork's IPO suspension was another blow in 2019. Still, Zume founder and CEO Alex Garden told CNBC that the company's relationship with SoftBank is positive, stating that Zume is "in constant discussion with them in a constructive way."

Dive Insight:

Though Zume's tech focus has been diluted by the closure of its robotic pizza arm, the retention of its mobile kitchen unit keeps one foot in restaurant tech operations while scaling up packaging. It previously secured $375 million in funding from SoftBank Vision Fund in November 2018 when its valuation reached $2.25 billion. That round of funding was supposed to help the company’s growth and hiring, but things don't seem to have gone very well since then, especially as SoftBank has pulled back from funding startups after taking major hits from Uber and WeWork.

Several top executives have left the company in recent months, and sources told Business Insider that it has been aggressively spending money on hiring and wavering between different projects while its robotics technology segment stalled. It also consolidated its pizza division under its Zume Forward division in November, which was focused on food truck technology. CEO Alex Garden canceled a companywide meeting in December that was expected to go over its 2020 strategy as well.

In late 2019, it partnered with &pizza to roll out a futuristic mobile kitchen fleet that would allow the D.C.-based pizza chain to deliver pizzas to consumers, while Pizza Hut has been testing Zume's compostable packaging, but it doesn’t appear to have made other major deals with chains since then.

Considering the company has been going in between packaging and robotic and tech innovations, it will need a much clearer and focused vision going forward for investors to keep backing it, but such a huge hit to its staffing could prove problematic if its strategy still remains cloudy.

Correction: In a previous version of this article, the percentage of Zume employees that will be laid off was misidentified. The job cuts will impact 53% of staff, according to a Zume spokesperson.