Toast (NYSE:TOST) layoffs are the talk of Wall Street after the restaurant management software company announced Thursday that it will cut about 550 workers, or roughly 10% of its workforce. Toast announced the sweeping layoffs alongside its fourth-quarter earnings report. The firm also managed to surpass consensus earnings expectations for the quarter.
The layoffs are estimated to cost between $45 million and $55 million in charges, due primarily in its fiscal first quarter. The cuts are also expected to amount to around $100 million in yearly savings.
Toast is joining a growing list of tech companies slimming down their workforces in the face of declining sales and rising costs. Still, Toast has little to complain about, at least on that front.
Indeed, the Boston-based company reported an EPS loss of 7 cents per share for Q4, better than an expected loss of 11 cents. Toast also surpassed revenue projections, reporting sales of $1.04 billion compared to forecasts for $1.02 billion. Sales increased nearly 35% year-over-year (YOY).
The company also managed to shed its net loss from $99 million in the same quarter last year to $36 million during the quarter. Toast has shared plans for about $250 million in share buybacks.
Toast also reported adding 6,500 new locations in its Q4, ending the year with roughly 106,000 locations total. This put something of a cheery spin on Thursday’s earnings report, despite the widespread job cuts.
“To wrap-up, we are executing across the board, growing our location count, driving value for our customers, seeding new longer term growth initiatives and positioning the company to operate fast and nimble going forward,” said Chief Financial Officer Elena Gomez.
Toast Layoffs Overshadowed by TOST Stock Surge
Investors seem clearly more interested in the company’s earnings beat today than in the Toast layoffs. Indeed, TOST stock is up by 17% as of this writing, bringing the company to 24% gains year-to-date (YTD).
Toast is best known as an all-in-one, cloud-based restaurant platform. Gaining popularity during the Covid-19 pandemic, the company gives restaurants the tools for mobile ordering and payment processing.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
