Peer-to-peer car sharing company Getaround will lay off 10% of staff starting Thursday. The layoffs are part of a restructuring aimed at putting Getaround on a path to “sustainable profitability and long-term growth,” the company said in a sentence.
According to LinkedIn, Getaround has 421 employees, so the staff cuts should affect about 42 employees. Getaround did not confirm the exact number, but a company spokesperson told TechCrunch that the layoffs exclusively affect North American teams across all departments.
The news comes a day after Getaround received a delisting warning from the New York Stock Exchange because its share price was trading too low. Following the company announcement, Getaround shares soared 17% after hours from $0.64 in the market near $0.75, but have since settled around $0.65, which remains being an increase of 2.19% at present.
Getaround, which joined the public markets in December through a merger with InterPrivate II Acquisition Corp., a special purpose acquisition company (SPAC), said it would also significantly reduce other operating expenses such as the company’s contract workforce. and external professional services.
Like nearly every other executive who has ordered layoffs over the past year, Sam Zaid, Getaround’s chief executive, said the restructuring plan is a response to “an uncertain near-term macroeconomic outlook, which has hit tech companies particularly hard.” ”.
Getaround expects the restructuring to result in cost savings of between $25 million and $30 million on an annualized run rate basis.
It is not yet clear how the company’s decision to go public through a merger with SPAC has affected its balance sheets. The deal is finalized in the fourth quarter of 2022 and Getaround has yet to set a date for its earnings release. Regulatory filings show Getaround’s cash burn in the first nine months of 2022 was $63.2 million. The company reported $45 million in revenue for the same period, which is down from $48 million a year earlier. At the end of the third quarter, Getaround had $27.2 million in cash to play with.
The merger would have given the company another $228 million gross receipts to stay up and running and achieve your next phase of growth. Despite the near-term cash infusion, Getaround stood by its decision to cut staff, saying it is “taking a multi-year view of responsible fiscal actions needed to maximize the use of revenue in the face of an unclear economic environment.” .
This article has been updated with more information from Getaround.