Despite what still looks like a very good overall jobs market, a pattern is emerging in a number of the spaces we cover. Massive funding rounds drove massive hiring. Now that the massive rounds are getting harder to come by, the hiring has slowed. And now the layoffs are kicking in.

We noted this last week when we wrote about the reckoning taking place in the quick commerce space, particularly in Europe. A massive land grab led to a realization that many companies had vastly overexpanded. And overestimated demand for bananas and beer in 15 minutes or less.

We started seeing it in buy now, pay later space. Klarna cleaned house in advance of raising a new $800 million round at a dramatically lower valuation. The company’s CEO tried to spin this as a victory (not entirely unpersuasively) on Twitter.

And now comes the ghost kitchen/virtual dining and restaurant tech space. We learned this week that Nextbite, the virtual restaurant platform that has relied heavily on celebrities to build its brand, has started to clean house and re-evaluate its business.

The cuts come soon after former Red Robin CEO Denny Marie Post took the helm at Nextbite, suggesting he was brought in to lead the company through the pivot from the happy times of doing deals with George Lopez and Wiz Khalifa to figuring out how to create a profitable and sustainable business.

Nextbite raised $120 million in 2020 when the investors may perhaps have overestimated the degree to which the world would shift to having food delivered to their homes.

Pain Across the Board

We’ve also seen reports that ghost kitchen/food truck platform Reef Technology is reducing its headcount by 5 percent.

And then there is Sunday, a Paris-based company that created a QR code payments app. The startup is now cutting staff and markets in an effort to, according to Sifted (a great Australian food tech publication), readjust to the current environment. The company launched its app in April 2021.

Sunday raised about $85 million last year and rapidly expanded to Spain, Portugal, Canada, and Italy. Its initial markets were the US, UK, and France. The company will now concentrate on its original markets, shitting down all four expansion markets.

So what’s going on? This isn’t the death of food tech. Any more than it is the death of fintech, or any of its subsets like buy now, pay later.

However, a very painful, and predictable, realignment is taking place. The seemingly overnight shift from growth at all costs to profits at any (human) cost inevitably creates head-spinning, vibe-killing layoffs and strategy shifts.

There may be another element in the case of quick commerce, ghost kitchens, and virtual restaurants. Founders and investors may have gotten way ahead of demand. This is despite various forecasts predicting massive growth in these new food frontiers. The truth is we still don’t fully know to what degree consumers want fast home delivery of everything from gourmet hamburgers to toilet paper.

As prices rise around the world, we may see a major shift. From being willing to pay for convenience to being willing to be inconvenienced to save a little money. And investors are likely to remain wary as we learn more about whether and how dramatically this shift is taking place.