Sweetgreen revealed Wednesday that it was cutting 20 percent of its corporate workforce.
CEO Jonathan Neman said in a letter that in April, Sweetgreen, which has more than 100 units, expected workers to return to the office after Labor Day and anticipated a more optimistic economic recovery. However, the opposite has happened as the U.S. appears to be reaching its third peak, with COVID cases rising across the country. Neman noted that many urban units, especially in New York City, have not recovered more than seven months into the pandemic.
The reduction only affects Sweetgreen’s corporate headquarters. No positions in the field will be affected by the reductions.
“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,” Neman said in the letter. “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 company created a two-year roadmap that envisions accelerating growth in new markets, reducing menu and operational complexity, investing in store leadership, and enhancing the digital business.
“We need to reduce our investment in areas that do not directly support these objectives,” Neman said.
In recent months, some Sweetgreen initiatives have connected to those goals while others haven’t.
For example, the chain recently released The Collections platform, a digital menu that offers consumers a list of categories and helps them with purchasing decisions while online or on the app. But in April, Sweetgreen expanded its offerings with the launch of its Plates menu—the brand’s first new category in four years. It’s unclear how the company’s effort to shrink the menu will affect the recently debuted category.
Laid-off workers will receive a minimum of six weeks of severance pay, and up to 12 weeks based on tenure. Sweetgreen will also provide company-paid COBRA through the end of 2020, two months of access to the Employee Assistance Program, and help from a personal career coach and an alumni opt-in program to aid in job searching.
“To those leaving us, we are grateful for the passion and purpose you brought to sweetgreen. Each and every one of you has helped build sweetgreen into what it is today and I can’t express how appreciative I am,” Neman said. “Over the past 13 years, the one thing I have been most proud of is this team. I have been inspired by all of you. This crisis has forced us to reflect and remember what makes sweetgreen what it is. I believe it’s our mission—connecting more people to real food. This remains unchanged and will continue to be our North Star.”
The news comes after Sweetgreen entered 2020 with momentum both in terms of sales and growth. The brand’s domestic sales increased to $160 million in 2019, or an 11.9 percent bump, according to FoodserviceResults. Sweetgreen’s U.S. footprint also grew from 86 to 100.
