Presto Cuts 17% of Staff as Restaurant Customers Reject Impersonal Experiences

As Presto sees declines in its on-premise technologies amid shifts in consumers’ digital dining expectations, the company is making major layoffs and reinvesting in its self-service capabilities.  

Specifically, the restaurant technology firm announced Friday (Nov. 17) that it is reducing its full-time workforce by approximately 17% in an effort to save on cost, a move that comes alongside the company’s selling $7 million in stock to venture capital firm Remus Capital.

“I have greater conviction in Presto than I’ve ever had before, as AI and automation technology gains significant traction among restaurant operators,” Krishna Gupta, Chairman of Presto and CEO of Remus Capital, said in a statement. “The market is shifting from a ‘lead adopter’ to a ‘fast follower’ one, which fuels our optimism about Presto’s near and long-term growth prospects.”

The move follows on the company announcing last month that its revenue had declined by 39% year over year in its 2023 fiscal fourth quarter, a decrease that Presto attributed primarily to a drop in hardware revenue for its Presto Touch pay-at-table solution for full-service restaurant chains.

In fact, on Tuesday (Nov. 21), the company shared that it had appointed self-service retail veteran Stephen Herbert to take over the Presto Touch business.

Consumers, for their part, are not particularly keen on these kinds of digital technologies for on-premise dining. For instance, PYMNTS Intelligence from last year’s study “Digital Divide: Technology, Customer Service and Innovation in the Restaurant Industry,” which drew from a survey of nearly 2,400 U.S. consumers, found that only 34% feel positively about viewing menus via a QR code. 

Plus, restaurant customers seek out personal, familiar experiences. The study “The Digital Divide: Technology, the Metaverse and the Future of Dining Out,” which drew from a PYMNTS Intelligence survey of nearly 2,500 U.S. consumers, found that 74% say that being served by the same waitstaff every time they visit a restaurant positively impacts their satisfaction, and 39% of consumers believe that restaurants are becoming less and less personal.

Moreover, a PYMNTS Intelligence survey of more than 2,200 U.S. consumers last year revealed that only 37% agree that more technology inside of restaurants means better customer service.

Yet technology is already taking over the industry. Data cited in the PYMNTS report “Inflation Puts Technology on the Menu for Restaurants,” the June edition of the “B2B and Digital Payments Tracker®,” created in collaboration with American Express, reveals that 76% of restaurants are already using automation in at least three areas of operations.

Indeed, with high costs of human labor, restaurants are continuing to adopt efficiency-boosting technologies in spite of the possible impact on customer satisfaction. Solution providers, for their part, see economic challenges boosting demand for labor-saving tools such as self-service capabilities, and eateries are increasingly turning to automated technologies.

“In a higher-cost labor environment where physical industries are rapidly embracing digitalization and automation, we believe Steve can help guide our Presto Touch team to drive value to shareholders,” Presto CEO Xavier Casanova said in the news release announcing Herbert’s appointment.