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Sweetgreen co-founder and CEO Jonathan Neman announced cuts earlier this week in a memo with employees.

Sweetgreen restructuring, cuts 20% of corporate workforce

Fast-casual chain hurt by lack of office workers in core urban areas like New York City.

Sweetgreen is restructuring its business and reducing its Southern California-based workforce by 20% as the pandemic continues to cripple the fast-casual brand’s core urban locations especially stores in New York City.

Co-founder and CEO Jonathan Neman announced the cuts earlier this week in a memo with employees.

“We have moved forward with reorganizing and restructuring our team so we can put our company on a stronger and more focused path to profitable growth,” he stated in an Oct. 21 Medium memo. “This will mean different things for different people — some roles will evolve, some departments will remain the same and unfortunately, some roles will be eliminated.”

The 20% staff reduction is occurring at the company’s Culver City, Calif.-based headquarters. Field level restaurant workers have not been impacted.

Neman said back in April that he had expected remote workers to return to offices after Labor Day.

“The reality is many of our restaurants in dense urban areas, particularly in NYC, have yet to recover,” he said.

In 2018, the tech-focused brand created Outpost locations, geared for office communities. These drop-off zones with shelving units were strategically placed inside regional or corporate headquarters of offices with large employee pools like Vice, Refinery29, Nike and Live Nation.

The lack of foot traffic in high-density commercial zones and tourist areas brought on by the pandemic has hurt many once-thriving brands. Shake Shack locations in New York, Las Vegas and airports have been hit hard, company officials have repeatedly stated. 

Neman said Sweetgreen is reorganizing with a focus on accelerating store growth in new communities. The company also plans to reduce its menu and operational complexity, while still investing in enhancing its digital ordering channels.

"This plan will change how we work. This means that we need to reduce our investment in areas that do not directly support these objectives," he said.

The menu trimming comes after the company added a new category to its menu during the pandemic. 

In a recent interview with Nation's Restaurant News, Chief Concept Officer Nicolas Jammet said the brand accelerated the rollout of Plates to meet the demand for heartier, dinner meals during the pandemic. These dishes, which feature center of the plate entrees like roasted steelhead trout and chicken chimichurri, landed on the menu in April -- the peak of stay at home orders across the country.

It's unclear if Plates will remain on the menu. Company representatives could not be reached for comment late Friday.

Sweetgreen was founded by a group of Georgetown University students looking for food options that didn’t have to sacrifice quality, health, taste or convenience.

The first 560-square foot Sweetgreen opened 13 years ago on the Georgetown campus, selling elevated bowls and salads.

The company, known as an industry innovator, now has about 110 units.

This is a developing story. Stay tuned for updates.

Contact Nancy Luna at nancy.luna@informa.com 

Follow her on Twitter: @fastfoodmaven

 

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