Toronto-based food ordering and mobile pickup app Ritual has laid off more than half of its employees and is set to reduce operations due to the impact of the COVID-19 pandemic.
In a public statement on Thursday, Ritual co-founders Ray Reddy, Larry Stinson, and Robert Kim pointed to the “devastating impact” COVID-19 has had on the restaurant industry. With many restaurants around the world having to shut down, Ritual, which operates by customers pre-ordering food and going into restaurants to pick it up, has been heavily impacted.
Sources with direct knowledge of the layoffs put the number at 196, which represents just over half of the company.
According to CEO Reddy, Ritual made the decision to lay off more than half of its staff. Sources with direct knowledge of the layoffs put the number at 196, which represents just over half of the company’s 365 listed employees on LinkedIn.
Ritual, which had expanded its app to more than 50 cities and seven countries around the world, is also set to reduce operations amid COVID-19. The startup will be “winding down and eventually withdrawing” operations in Germany and the Netherlands.
“We are taking necessary steps to restructure how we operate and put us on solid footing to continue to serve our customers, merchants and neighbourhoods during this moment and the recovery to follow,” wrote Reddy.
BetaKit has reached out to Ritual for comment, but the company had not responded by time of publication.
Founded in 2014, Ritual has raised more than $143 million CAD to date, including a $90 million CAD ($70 million USD) Series C round led by Georgian Partners in June 2018. About a year and a half later, Ritual expanded into its first non-English speaking markets including Germany and the Netherlands, as well as Hong Kong.
The pickup app launched in Toronto in 2014 and the US three years later. Ritual has seen a growing number of competitors in its space, from Uber Eats, which began piloting its new “Pickup” service in Toronto earlier this year, to Foodora, and other order-ahead apps from retailers like McDonald’s and Starbucks.
The restaurant industry has seen a massive hit due to COVID-19 and government measures to limit non-essential businesses in order to curb the spread of the virus. A recent survey from Restaurants Canada estimates that 800,000 jobs have been lost in the sector in Canada alone. Ritual, which heavily promotes its service to companies and workers, has been affected by the closure of restaurants as well as large swaths of the workforce that are working from home.
“Our hearts go out to our merchants and their employees who have been affected by COVID-19, they serve as the life of the cities in which we operate,” said Reddy in his statement. “It is against this backdrop that we are taking necessary steps to restructure how we operate and put us on solid footing to continue to serve our customers, merchants, and neighbourhoods during this moment and the recovery to follow.”
Ritual’s layoff announcement comes less than 24 hours after Finance Minister Bill Morneau provided much-anticipated details about the federal government’s 75 percent wage subsidy program. When the program was originally announced on Friday, Prime Minister Justin Trudeau had expressed hope that it would prevent further layoffs and allow companies to rehire.
With businesses required to meet criteria based on year-over-year revenue, many in the tech sector have argued that the majority of Canadian startups do not qualify for the program. It is unclear at this point whether the current federal support measures played a role in Ritual’s decision to make cuts.