SAN FRANCISCO -- Food.com here last week said it laid off 100 workers and closed an office in Seattle. The company also said its chief financial officer and chief operating officer have resigned.
The staff cuts -- representing approximately half of Food.com's employees -- reflect a shift toward focusing on more profitable relationships with chain restaurants and less on independent restaurants, Elizabeth Johnson, company spokeswoman, told SN. Food.com is an Internet food portal offering restaurant reviews, food content and on-line takeout orders for 17,000 restaurants in the U.S.
"We made an analysis of what was profitable in our business and what we were losing money on and these changes reflect that," Johnson said.
The changes will also greatly reduce Food.com's capital needs, she said, and should allow it to remain operating without the need for additional funding for more than two years.
Food.com's practice of receiving orders, then relaying them by fax or phone, was labor-intensive and inefficient, Johnson told SN. Instead, Food.com will focus on a more direct, point-of-sale system it has developed and rolled out for chain restaurants such as Papa John's pizza. Food.com operates the Web site for Papa John's, Louisville, Ky.
Food.com charges its members a monthly fee plus a percentage of orders made through its Web site, Johnson said.
The company will not drop the restaurants already on its system but will not add additional independent locations, she said. Around half the employees let go by Food.com were working as salespeople for independent chains, she said.
Food.com is also canceling or scaling back earlier plans to add a delivery service. In July, Food.com walked away from an offer to purchase Takeout Taxi Holdings, a Herndon, Va.-based service that took orders and delivered meals from participating restaurants.
That deal, announced in March, came apart when Takeout Taxi's franchisees couldn't agree to Food.com's offer, Johnson said.
Joan Varrone, Food.com's chief financial officer, and John Laing, its chief operating officer, both resigned and will not be replaced, the company said. Laing will remain on Food.com's board of directors.
In March, the privately held company secured $80 million in funding from a group of backers including McDonald's, Kraft Foods and Blockbuster Video.