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Innovation Economy

At ezCater, they got a dreaded e-mail, and then 420 lost their jobs

Here’s how it went down at the catering startup, from the perspective of the boss and an employee

The Boston startup ezCater, which had been growing, was hit hard by the coronaviruse shutdown.
The Boston startup ezCater, which had been growing, was hit hard by the coronaviruse shutdown.David L. Ryan/Globe Staff

On Tuesday, April 7, employees of the Boston company ezCater woke up to an e-mail from their chief executive, Stefania Mallett: Be available this morning for a call from your manager. All 945 employees who received the e-mail knew what it meant. This was the day they would find out who was being laid off, and who would still have a job.

This is how the layoffs played out for Mallett, a 64-year-old who traces her career back to the Massachusetts tech “miracle” of the 1980s, and Lily Cohen, a 24-year-old marketing staffer who joined ezCater last year — her first job after college.

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The company was founded in 2007, with a mission of making it easier to get reliable catering for business meals. In recent years, it had become one of Boston’s fastest-growing companies. The ezCater website features a roster of menus from restaurants that will deliver a big order for a company meeting. Schedule the date and time you want, and the food appears, with ezCater taking a 15 percent commission on every transaction.

Last April, the privately held company raised $150 million in a funding round that brought its valuation to more than $1 billion — making ezCater what’s known in startup circles as a unicorn. To celebrate, there were unicorn cupcakes all around.

But precisely a year after all that sweetness, the company was watching as office closings and shelter-in-place policies brought its fast-growing business to a crawl. It had just launched a national marketing campaign, with highway billboards and mass transit ads bearing the slogan “Food has to work for work.” Suddenly, almost no one was at work, and the idea of eating from communal salad bowls and pans of lasagna had lost all appeal.

Mallett says the declining orders were hardly a secret; she prides herself on having created a “radically transparent” company culture. “People could see the business results,” Mallett says. “They knew bad things were happening.”

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The company was hustling to get its network of caterers to shift to individually packaged meals, rather than family-style ones, so that it could effectively sell to the essential businesses — such as factories and hospitals — that were still operating. On several all-hands videoconferences that Mallett led, there was talk of cutting costs on software spending and marketing, and the possibility of furloughs or layoffs.

As business deteriorated in March, several outside advisers suggested that Mallett move quickly to eliminate jobs, she says. But she didn’t want to be rushed, especially since there was so little information about when people might return to work. May? September? “What if it comes back in pockets around the country,” she wondered. Mallett says she and other company leaders created a financial model to think through “the best assumptions you can make about what you don’t know.”

Mallett says two things guided her decision-making. The first was her own experience being laid off earlier in her career. “I was asking people, ‘Are we going to do layoffs?’ And the management of that company lied about it until the day it happened,” she recalls.

She also wanted to try to avoid a series of layoffs throughout 2020. “The second layoff is the really bad one,” she says, “because everybody looks over their shoulder all the time,” worrying about what will come next. “We tried very hard to make this one painful and deep, so that we wouldn’t have another one. We cut as deep as we could work up the courage to do.”

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By the time April arrived, Mallett was telling employees on a Zoom videoconference that a decision on layoffs was coming soon. She recommended they take any personal photos or files off of their company laptops. It seemed like she was struggling to hold back tears, according to several former ezCater employees.

Lily Cohen had started working at ezCater in February 2019 as an intern, just after graduating from Northeastern University. The internship turned into a job in June. Cohen worked as a brand marketing associate, helping ezCater manage its trade show appearances, marketing events, and the annual company holiday party.

The job was the reason she stayed in Boston. Cohen felt it was designed especially for her skills and interests: “They hired me for me,” she says. “I loved the company so much. It was a place that made me really happy.” In January, she helped plan an offsite meeting for the marketing team: There was brainstorming and talk about big goals for 2020. At the end of the day, everyone went to Flight Club in the Seaport to have drinks and play darts.

On April 7, when Cohen checked her e-mail around 9 a.m., the note from Mallett was already in her inbox: The layoffs were happening.

“You are always hoping that it’s not going to be you,” Cohen says. “I was picturing all the reasons why it wouldn’t be me. I was a lot cheaper than a lot of the more senior people there.”

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Cohen knew she’d need to be on Zoom, and she “wanted to look presentable,” so she took a quick shower and put on a favorite sweatshirt.

Cohen then got a message from her manager’s boss, asking her to join a Zoom meeting around 9:45. Before it took place, she got a text from a colleague who had already been laid off and had her access to the company’s computer systems shut off. At that point, Cohen says, “I kind of knew — I just had a feeling.”

The videoconference was led by her manager’s boss, and another executive. Cohen was being laid off, as was her manager. All told, 420 employees would lose their jobs.

“We spoke to every single employee,” Mallett says. “You did not get laid off by e-mail or a Slack message. You had a face-to-face conversation” over Zoom.

Yet it was tough to do layoffs remotely, she acknowledges. “There’s a dimension of warmth that you could only project through your voice.” There were no hugs and no handshakes to thank people for the work they had put in. “I couldn’t have been as warm as I would’ve liked to be,” Mallett says, choking up a bit.

In the span of about a month, she says, “We went from being this tremendously fast-growing company to having to lay off half our people.”

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Mallett writes via e-mail that she and the rest of the leadership team at ezCater took pay cuts: “It feels right for the execs to kick something in, even though what has happened is in no way the fault of anyone in the company.” (People at other levels of seniority didn’t have their pay cut, she adds.)

Employees couldn’t go out at the end of the day to have a last drink together at a favorite bar, as often happens at companies when there are job cuts. But there were alumni chat groups set up quickly on the messaging system Slack, and former colleagues made dates to connect for coffee or wine over Zoom.

The layoffs affected almost everyone at the company that Cohen interacted with daily, so it was “a little bit comforting that it happened to so many other people," she says. And it was “maybe less embarrassing” for having happened over Zoom, rather than in a conference room.

But the hardest part, Cohen says, is that she was by herself. After the Zoom call, she was alone. There was no one to hug, that day or since. Cohen, who like others is sheltering in place because, occasionally goes on walks with her sister, who lives nearby, but she has not been near the rest of her family.

Cohen got about four weeks’ pay as severance, and she has applied for unemployment compensation. She has some savings and is not too worried about how soon she will find her next job. “I want to wait for something I know I’m going to really enjoy,” she says. “I’m trying not to put a ton of pressure on myself.”

None of the colleagues she worked most closely have yet found new jobs.

Shortly after she was laid off, ezCater shut off her company laptop, but it hasn’t sent instructions about how to return it. “I put it up in my closet, so I don’t have to look at it every day,” Cohen says.

And everything she left at her desk is still there — the photos, the string of holiday lights, the certificates she received at company events — right where she left them on March 10, the last day most employees went into ezCater’s office.

The plan is that when it’s safe to be back in the office, there will be a day when everyone who lost their job can go in and pick up their belongings. No one can guess when that will be.


Scott Kirsner can be reached at kirsner@pobox.com. Follow him on Twitter @ScottKirsner