Waitr Holdings this week laid off most of the operations and dispatch staff members who remained at the original Minneapolis office of Bite Squad, the food-delivery firm that was one of the brightest stars on the Twin Cities tech scene this decade.
Waitr cuts jobs at Bite Squad's former Minneapolis HQ, consolidating operations in Louisiana
App-based food-delivery business is also bailing out of some markets.
The move came just after the departure of Jeff Yurecko, the last of the Bite Squad top managers still on the executive team of the combined firm. Yurecko, who was chief financial officer, announced last month that he would finish at Waitr on Nov. 1.
The changes effectively end the dual-headquarters structure that prevailed for months after the Lake Charles, La.-based Waitr in January finalized the $321 million purchase of Bite Squad. The deal had been announced just six weeks earlier and represented the biggest exit event this decade for a Minnesota tech startup.
Kyle Hale, a former Bite Squad executive who had become chief operating officer of Waitr, left the company in September. Kian Salehi, who started Bite Squad in 2012 and was its chief executive, helped in the early integration work of the two firms but stepped away in the spring.
Investors' expectations for the app-based food-delivery companies soured over the summer. Waitr shares have lost 95% of their value since spring. Last week, the latest results for the nation's largest food-delivery service, GrubHub, missed forecasts and the firm's share value plunged 40% in one day.
Separately, Waitr said Tuesday that it decided to halt delivery operations in some markets, but it did not release details. The firm, due to announce quarterly results on Thursday, is restricted in what it can say ahead of that time. In a statement, the firm said: "In order to position ourselves for the future, we've made the unfortunate but necessary decision to close a subset of low-performing markets and reduce our workforce. We are sincerely grateful for the contributions of the employees affected by this change and are committed to supporting them, including providing separation packages."
Waitr said it was not closing its office in Minneapolis but that most operations were being consolidated in Lake Charles. The company didn't say how many people in Minneapolis were idled this week. A former Bite Squad employee who asked not to be named said it was around 30.
"Eliminating jobs is the last thing a business ever wants to have to do," Adam Price, chief executive of Waitr, said in a statement. "Actions taken this week were done to best position Waitr for the future and enable the company to continue providing a consistent, reliable experience to our customers, and valuable relationships to our restaurant partners."
Waitr and Bite Squad were about equally sized when they combined and their integration for months appeared to be proceeding smoothly.
The two firms stood out in the app-based food-delivery business because they hired drivers rather than relying on freelancers. Together, Waitr and Bite Squad reached 700 towns and cities across 27 states and initially projected revenue this year of around $250 million. But when the company announced second-quarter results in August, Waitr lowered its full-year revenue forecast to around $215 million. That sent the company's stock, which peaked at around $14 a share in March, tumbling sharply. The company in August also announced the elevation of Price to the CEO position that had been held by Chris Meaux, who founded Waitr in 2013.
On Tuesday, Waitr shares closed down 11% at 46 cents a share.
Evan Ramstad • 612-673-4241
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