Portillo’s, the Chicago-based fast-casual restaurant chain known for its hot dogs and Italian beef, has laid off 18% of its corporate staff amid rising food costs and declining same-store sales, the company announced last week. The cuts, which came into effect on July 31, affect approximately 36 employees at the Oak Brook corporate headquarters and a small number of field management roles, though restaurant-level employees remain unaffected.
The chain reported the layoffs during its second-quarter earnings call Wednesday as part of broader efforts to improve operational efficiency and focus resources on long-term growth priorities. Brett Patterson, who became CEO in February following the departure of former CEO Michael Osanloo in September, acknowledged the difficult decision but emphasized the need to adapt to a challenging restaurant environment.
“We must ensure our resources and future investments are directed at the right priorities,” Patterson said in a statement. The restructuring is expected to result in around $1.1 million in charges, according to a Securities and Exchange Commission filing.
Despite the corporate downsizing, Portillo’s reported a 5.6% increase in chainwide revenue during the second quarter, largely driven by the opening of seven new restaurants this year and eight additional locations planned for 2025. However, same-store sales fell by 1.2% during the quarter, with restaurant traffic declining 3.4%. Price increases introduced in April, averaging 2%, helped mitigate some inflationary pressures.
Operating expenses rose 8.1% in the quarter, mainly due to higher costs for beef and produce. Patterson indicated that the combination of corporate layoffs, supply chain improvements, and smaller new store formats could generate $10 million to $15 million in annualized savings.
Founded in 1963 as a single hot dog stand in Villa Park, Portillo’s now operates 109 restaurants across 11 states. Expansion has slowed, but growth continues with recent openings concentrated in Texas, including the chain’s inaugural airport location at Dallas-Fort Worth International Airport. Portillo’s also plans to open a flagship restaurant on North Michigan Avenue later this year and launch its first Wrigleyville location near Wrigley Field in 2025, featuring a small indoor dining space and its first walk-up window.
While the national chain is facing sales challenges, Patterson noted that Chicago-area restaurants are performing well, outpacing broader trends. “Chicagoland is performing very well,” he said, highlighting strong second-quarter results and continued momentum into the third quarter.
In addition to streamlining operations, Portillo’s has strengthened its leadership team in recent months. Christopher Hansen joined as executive chef in June after serving at the fast-casual Mexican chain Guzman y Gomez, which closed its U.S. operations earlier this year. Kevin Kalicak, a former executive at Darden Restaurants, is set to become chief financial officer on September 7.