US-based restaurant guide and home delivery website Food.com has dismissed half of its 200-strong workforce and announced plans to close down its Seattle office. Operations will continue at the San Francisco HQ for the time being, although COO John Laing and CFO Joan Varrone have resigned.
The news provides another example of a business-to-consumer (B2C) website which failed to translate forecasts into real sales in step with the business plan. The layoffs are intended to improve the company’s chance of long-term survival, and CEO Rich Frank remains confident that refocusing on the more profitable restaurant business and switching away from neighbourhood deliveries will get results. It will be crucial to get restaurant chains on board, as a one-time signing with a chain can mean instant sales to a large number of restaurants.
Nonetheless, any company that sheds half its staff is vulnerable, and perhaps none more so than a dot.com. Reorientation towards the B2B sales stream may give the group new momentum, but Food.com will have to work hard to convince investors that their money is in safe hands.