In a significant downsizing move, the neighborhood-focused social platform Nextdoor is laying off 25% of its full-time staff as part of a broader initiative to cut costs, with the company's losses expanding. The layoffs were announced alongside a third-quarter financial report which unveiled plans to slash personnel expenses by up to $60 million annually.
Nextdoor has said that nearly 200 employees will be affected by the recent job cuts, which are seen as a key component of the company’s strategy to reduce operating expenses. The decision comes as Nextdoor aims to manage its finances more effectively in the face of a challenging economic environment.
CEO Sarah Friar stated that reducing the company’s workforce has been the most difficult decision the management has had to make. Despite a strong belief in the platform's community-building potential and a solid financial standing, Friar emphasized the necessity to meet shareholder commitments by adjusting the business size to match projected revenues.
Aiming for Break-even
With the reported quarterly losses climbing to $38 million, up from last year's $35 million during the same period, Nextdoor's revenue saw a modest increase of 4% to $56 million. The growth in weekly active users, which rose by 6% to 40.4 million, contrasts with the financial challenges. The company plans to reach a break-even point in quarterly free cash flow by the end of 2025.
The tech industry, along with finance, hospitality, newspapers, and some higher education sectors, is experiencing a wave of layoffs. Nextdoor's staff reduction is part of this larger trend affecting numerous companies as they navigate through economic pressures.
In conjunction with the layoffs, Nextdoor also disclosed the departure of Chief Financial Officer Mike Doyle. Matt Anderson, currently in charge of finance and strategy, will be stepping into the CFO role. This change in leadership occurs as the company is reevaluating its financial strategies amidst the cost-cutting measures.