UPDATE: CNBC reports Zume is laying off 360 people and shutting down its pizza delivery service.
Zume, the startup famous for its pizza-making robots, is set to lay off 400 people, or 80 percent of its staff, according to a report from Business Insider (subscription required) yesterday. (See update above.)
According to Business Insider, the layoffs come as the company has faced challenges securing more funding from Softbank. Zume had raised $375 million from Softbank in November of 2018, and part of that deal was reportedly an additional $375 million investment from Softbank at a later date. Zume has raised $423 million in total to date.
Business Insider writes that the layoffs follow a number of executive departures from the company, including its CMO, general counsel, and vice president of talent, as well as the president of Zume’s original pizza business.
While Zume’s robotic pizza has typically grabbed all the headlines, the company was actually more of a data play. It claimed to be able to take tons of data like weather reports, purchasing history, and local sporting events to predict how many pizzas and what kind it needed to make in an evening. From there it would parbake and assemble the pizzas and cook them in a mobile oven on the way to being delivered.
The cook-on-the-go concept was later abandoned by the company in favor of parking mobile kitchens in designated neighborhoods in more of a hub-and-spoke model that only relied on drivers to deliver the pies over the last mile.
Zume had also placed big bets in 2019, launching a packaging business with the acquisition of compostable packaging company Pivot Packaging in June of last year, and launching a new program that was in essence a mobile ghost kitchen that restaurants could license. The first customer for that mobile ghost kitchen was &Pizza on the East Coast.
However, it looks like the money is drying up and Softbank, still dealing with WeWork’s implosion, is probably less inclined to throw more money into Zume if the returns aren’t there.
Right now, we don’t know where all the layoffs will hit and where Zume will focus its resources. Will it abandon pizza making to focus on selling packaging and licensing out its tech stack? We reached out to Zume to find out more information and will update this post as we learn more.
Save your money and taste buds, there’s nothing like a home made pizza with quality ingredients.