SoftBank-backed Zume just had an all-hands meeting to officially announce hundreds of layoffs and abandon its pizza-making robots

Melia Robinson

• On Wednesday, Zume's CEO told employees that the company was eliminating 360 jobs from its staff of 500 employees.
• The meeting was hastily scheduled after Business Insider reported Monday that roughly 400 employees were going to be terminated on January 13, but leadership kept details of the meetings under wraps until the very last minute, according to internal emails reviewed by Business Insider.
• According to multiple sources, Zume CEO and cofounder Garden was late to Wednesday's meeting in the San Francisco office, which he told employees was mandatory in an email sent late Monday. He did not attend meetings in other offices, sources said.
• According to sources, Garden's emailed statement confirmed that Zume Pizza, the business division responsible for the pizza-making robots, will close and employees in that division were terminated.
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Employees at embattled startup Zume gathered on Wednesday to learn the fate of the company, and their role in it, in a hastily scheduled company-wide meeting organized by cofounder and CEO Alex Garden.

In an email late Monday, Garden told employees that a "mandatory" meeting would be scheduled for Wednesday to address previous reporting by Business Insider that the startup famous for its pizza-making robots was laying off roughly 400 of its nearly 500 employees across multiple offices. The meeting was hastily scheduled and shrouded in secrecy, multiple sources told Business Insider, and the time of the meeting was not shared with employees until an invitation appeared on their calendars with room assignments on Wednesday morning, sources said.

Although Garden's Monday night email told employees to "make arrangements to attend" the meeting, Garden himself arrived late to the meeting on Wednesday morning as the team convened in San Francisco, multiple sources told Business Insider. The entire San Francisco team was laid off and will receive up to 4 months severance, sources said. A company spokesperson previously told Business Insider that all terminated employees will receive the same compensation.

Garden sent an email confirming the layoffs on Wednesday morning minutes before the meeting was set to take place without much explanation outside of a "strategy shift" at the startup. In the email, which was reviewed by Business Insider, Garden outlined the strategic vision for Zume and confirmed the closure of its flagship pizza-making robot division, Zume Pizza. Rhonda Lesinski, the head of Zume Pizza, announced her departure in December.

"As we move forward with this new strategy, many of the current roles at Zume no longer exist and we regret we must say goodbye to a number of our valued friends and fellow Zumers," Garden wrote in the email.

The new strategy, according to Garden, includes doubling down on compostable food packaging, which is currently in a trial phase, sources said. Garden suggested in the email that the startup will expand its manufacturing facilities and capabilities in 2020, but did not provide specifics other than the facilities will be in the United States and India. The startup will continue to provide "food production and delivery systems" as well, the CEO said. Sources told Business Insider that Garden personally told terminated employees in San Francisco that they could apply for any of the open roles at Zume. All business functions will be concentrated in the startup's Mountain View, Calif., headquarters, multiple sources said.

Some sources described the disorderly announcement as another example of disappointing leadership and lack of transparency by Garden, which has contributed to cratering employee morale. Coupled with high executive turnover and a meandering business strategy, Garden has struggled to responsibly grow the $1 billion business following a $375 million investment from SoftBank, sources said.

Employees have become increasingly frustrated with the secrecy from leadership, including a canceled all-hands meeting in December that was scheduled to review 2020 goals, sources said.

Multiple sources called Garden a "coward" for his handling of the strategy shift and resulting layoffs.

In total, 360 staffers will be affected across offices. A company spokesperson told CNBC that the company will be adding 100 new roles in the packaging division.

One source that was not terminated said remaining employees were told to expect a meeting on Friday for directions on how to proceed, but it wasn't clear whether that included codes of conduct and procedures or day-to-day work functions. All employees were locked out of company-owned email and Slack accounts when the meeting started and were not given a timeline for when access would be restored, one source said.

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