latchThe proptech smart locks company, which raised $152 million in known private capital before making its stock market debut via SPAC last year, is running another layoff. According to an email obtained by TechCrunch earlier this month, the startup cut 30 people, or 6% of its workforce.
now as confirmed With a late press release on Friday, Latch announced that it had laid off a total of 130 people, or 28% of its total employee base. The cuts affected chief sales officer Chris Lee and vice president of sales Adam Sold, sources said.
In an email TechCrunch saw, Latch’s CEO, Luke Schoenfelder, told employees that the first round of layoffs were carried out “to make sure Latch is on the path to sustainable growth.” He also said that Latch will be shrinking some areas of the business, but he’s not sure if that means cutting the entire product or reducing the resources behind each vision. TechCrunch has contacted Latch about the layoffs this week, but has not yet received a response at the time of the announcement.
Two weeks of layoffs are rare if they don’t show frenzied work behind the scenes. In this case, it feels like a series of knee cramps coming after straining for a few weeks. In April, less than a year after taking office, Latch CFO left the company after going public through a reverse merger. At the time, TechCrunch explained a broader SPAC breakdown and explained that Latch was not immune.
For example, the market price of Latch per Yahoo Finance was $11 per share. It is currently trading at just over $2 per share. Since their debut in June 2021, their value has decreased by more than 80%. This extreme depreciation and investor confidence could allow a company to show that it can cut costs quickly to reach better conditions.
Upon completion of the headcount, Latch expects to reduce annual run rate costs by approximately $40 million across research and development, sales and marketing, and general and administrative expenses. The press release says The layoffs and restructuring will cost around $4-6 million of the company’s total restructuring costs it expects to spend in the second quarter of 2022.
As we’ve seen over the past month, both public and private tech companies have announced massive layoffs across sectors. Staff at Section4, Carvana, DataRobot, Mural, Robinhood, On Deck, Thrasio, MainStreet, and Netflix were impacted by headcount cuts. Some giants, such as Twitter and Meta, are enforcing employment freezes or announcing strategy changes, such as Uber.