Portillo's, the iconic Chicago restaurant chain known for its hot dogs and Italian beef, is trimming its corporate workforce as expansion into other markets has proven costly.
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The company cut 18% of its corporate employees at its suburban Oak Brook headquarters, while also laying off a small number of field management roles, Portillo's announced in a release Wednesday. It said the layoffs didn't impact restaurant-level workers.
Portillo's has about 140 employees at its Oak Brook headquarters, according to the Chicago Sun-Times.
"The primary objective was to align our team's resources and decision-making more directly with the priorities that matter most to our operators and guests," Portillo's CEO Brett Patterson said on the company's second-quarter earnings call on Wednesday.
The company's employee cuts come as the chain pumps the brakes on its real estate expansion.
Portillo's opened three restaurants in the second quarter and four in the first, all of which were in Texas. The company plans to open one additional store this year in Chicago.
The rapid pace and development cost of the chain's expansion into Texas in recent years has made it difficult to hit expectations on sales and returns, Patterson said. The number of restaurants in Dallas and Houston has put pressure on store-level margins, he said.
"Candidly, we just built too many too quickly. In Dallas, we built 12 in 3.5 years. In Houston, we built six in 16 months," Patterson said on the call. "That's not something that we would repeat going forward."
To solve the problem, Patterson said the company is doing a full assessment of all of its locations.
Portillo's plans to open roughly four to six stores in 2027 and is actively identifying sites for 2028, Patterson said. In the first quarter of 2028, the company plans to launch a new store prototype to reduce its footprint and operate more efficiently.
Portillo's has made sweeping changes to its executive team over the past several months, this week naming Kevin Kalicak its chief financial officer.
Patterson took over as CEO in February after previous CEO Michael Osanloo resigned in September. Jennifer Pecoraro-Striepling came on as chief development officer in March.
"What we learned is, if we had things to do over again, we wouldn't make a lot of those decisions," Patterson said. "But we were already committed, and we're going to figure out the best way to move forward with those locations here very shortly."
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