Sim Sandwich to Lay Off 230

March 4, 2001
Sim Sandwich to Lay Off 230

By Jakob Kreutzfeld

ustin, Texas — Moving to trim operating costs, Sim Sandwich announced yesterday that it will lay off approximately 230 employees at its headquarters in Austin, Texas. The move comes in response to pressure from investors alarmed at the diminishing prospect of profitability in the virtual food business. The workforce reduction will leave two employees at the company, founder and CEO Nick Baker, and the office mascot, a wooden cat.

The layoffs follow a recent trend among dot com startups with shaky business models, many of which have had trouble turning a profit despite lavish funding. Sim Sandwich was founded on the premise of selling virtual food to people over the internet, allowing them to construct and consume sandwiches at the click of a button. With $30 million in venture capital, the company moved into spacious new headquarters and geared for expansion.

There were storm clouds on the horizon, however. As Sheila Banks, a programmer for Sim Sandwich recalls, "People in the office weren't using the site. They were bringing their lunch to work, instead of making it online. If people won't use it for free, they're certainly not going to pay for it."

Even Baker admits, "There just wasn't the market for virtual food that we had predicted. I guess it was sort of a stupid idea." Baker plans to keep the site in operation for the forseeable future, "To make the cat happy," but has no new features planned. The wooden cat could not be reached for comment.