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Restaurant management software maker Toast announced on Thursday its decision to cut its workforce by 10%, resulting in the termination of 550 employees.

According to CNBC, the move comes amid the rising trend of layoffs across the technology sector, with companies like Cisco also implementing significant job cuts in response to various market challenges. On Wednesday, Cisco announced it would terminate 4,000 jobs as sales dropped due to customers' cautious spending.

Toast Joins Trend of Tech Layoffs

Despite the layoffs, Toast reported fourth-quarter earnings that exceeded Wall Street's expectations. The company experienced a nearly 35% increase in revenue year over year during the quarter.

According to a statement, the company's net loss shrank to $36 million from $99 million in the year-ago quarter. Toast has committed $250 million for share buybacks, signaling confidence in its long-term prospects.

The surge in demand for Toast's services during the pandemic, driven by the adoption of its mobile ordering and payment solutions by restaurants, fueled the doubling of the company's revenue.

However, since its debut on the New York Stock Exchange in 2021, demand has tapered off, declining from peaks of 37% and 45% in the third and second quarters, respectively, according to CNBC.

$100 Million Savings of Toast

Despite intensified competition from industry players like Block, Fiserv, and Shift4, Toast continues to witness transaction growth. Gross payment volume reached $33.70 billion or 32% higher than the $33.53 billion agreed upon among analysts surveyed by StreetAccount.

The layoffs at Toast are expected to incur charges ranging from $45 million to $55 million, mostly in the first quarter, with anticipated annualized savings of $100 million. Those layoffs come weeks after Toast's co-founder and COO Aman Narang replaced Chris Comparato as CEO.