Travis Kalanick's $15 billion food tech company cuts employees globally in profitability push

City Storage Systems' restaurant tech arm cut staff this week, including more than 80 in the US.

Otter, which runs a number of software and hardware businesses, is seeking profitability.

Otter has $80 million in annual recurring revenue and continues to grow, an executive said on Thursday.

Six months after layoffs at food technology company City Storage Systems, another round of cuts hit teams globally, per leaked audio obtained by Business Insider.

More than 80 US employees were cut at Otter, the company's restaurant tech arm, said a source familiar with the people laid off. Layoffs also affected teams in Canada and Latin America, among other regions.

Otter head Guido Gabrielli told staff in an all-hands meeting on Thursday that Otter made the cuts because the company is "trying to get profitable as soon as possible," per audio obtained by Business Insider. He said leaders would "try our best" to avoid future layoffs.

The total number of staff affected was not immediately apparent. CSS employs about 3,300 people — down from about 4,300 in November, before the last significant layoffs.

A representative for CSS did not immediately respond to a request for comment sent outside normal business hours.

In fall 2021, CEO Travis Kalanick raised $850 million for CSS from investors including Microsoft, at a $15 billion valuation. Since then, the company has faced similar headwinds to the rest of the tech and real estate industries, including higher interest rates and slower customer demand growth than during the pandemic boom.

Through CSS, Kalanick wants to reinvent the business of food, just as he upended transportation by founding Uber. CSS's other big unit is CloudKitchens, which renovates warehouses into ghost kitchen facilities for mom-and-pop restaurateurs and big companies like Chick-fil-A.

CSS's chief financial officer left in January, BI previously reported.

At Thursday's all-hands, Gabrielli said the company has notched $80 million in annual recurring revenue and has 100,000 restaurants paying for at least one service.

"Growth is not something very common today in the SaaS world and in the tech world and we still have it," Gabrielli said.

Otter's business includes order management for platforms like DoorDash; a virtual menu arm; a revenue recapture business, which claws back money owed to restaurants; and a newer point of sale system.

Gabrielli said Otter has about 500 McDonald's customers for its revenue recapture business. That product faces increased competition and slowing growth, he said.

Otter's point-of-sale system "is doing fantastic" for its small size, with about half a million dollars in revenue annually.

Otter's leaders have also talked with tech companies that are trying to raise money, Gabrielli said. Some companies that notched billion-dollar valuations two years ago — at the height of zero interest rate-catalyzed investor enthusiasm — are now struggling with a year of no growth, he said.