US: Short-term rental and hotel management company, Sonder, has announced that it is set to make 106 corporate employees redundant, accounting for 17 per cent of the company’s overall workforce, by the end of March.
According to a financial filing on Tuesday, in news first revealed by Skift, Sonder said that it would take on the costs tied to the redundancies but that the move would save the company around $11 million a year in the long term.
The company wrote: “Total costs and cash expenditures for the reduction in force are estimated at $2 million to $3 million, substantially all of which are related to employee severance and benefits costs and will be recognised in the first quarter of 2024. The company expects to pay the majority of these reduction in force amounts in the first quarter of 2024.
The layoffs have been attributed to an oversized portfolio with properties underperforming on their leases and a desire to further reduce overhead costs.
It represents the latest round of cuts for the San Francisco-based operator since going public via a business combination with special purpose acquisition company [SPAC] Gores Metropoulos II in January 2022.
That June, Sonder restructured its organisation to lay off 21 per cent of its corporate team and seven per cent of its frontline staff, and last March, the company laid off a further 100 corporate employees [14 per cent of its team] as it prioritised increasing its cash flow and “expanding into new industry segments”, including expanding its business travel segment.
Prior to that, Sonder cut its workforce by 22 per cent and furloughed an additional 11 per cent of its staff at the start of the Covid-19 pandemic.
Since its founding ten years ago, Sonder has yet to reach profitability and is now aiming to generate positive cash flow to reverse its fortunes. More information is likely to be revealed in the company’s 2023 entire year and Q4 earnings reports, which are yet to be scheduled.
