Peer-to-peer car sharing company Getaround is laying off 10% of its staff from Thursday. The layoffs are part of a restructuring aimed at putting Getaround on a path to “sustainable long-term profitability and growth”. company said in a statement.
According to LinkedIn, Getaround has 421 employees, so the staff reduction should affect about 42 employees. Getaround would not confirm the exact number, but a company spokesperson told businessroundups.org that the layoffs only 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 stock price was trading too low. Following the company’s announcement, shares of Getaround were up 17% after hours from $0.64 in a market close to $0.75, but have since stabilized at around $0.65, which is still up 2% today. .19%.
Getaround, which entered 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 costs, such as the company’s contract staff and outside professional services.
Like nearly every other executive who has filed for resignation in the past year, Sam Zaid, Getaround’s CEO, said the restructuring plan is in response to “uncertain near-term macroeconomic prospects, which have hit technology companies particularly hard.”
Getaround expects the restructuring to result in cost savings of between $25 million and $30 million annually.
It is not yet clear how the company’s decision to go public through a SPAC merger has affected its balance sheets. The deal closed in the fourth quarter of 2022 and Getaround has not yet set a date for earnings announcement. Regulatory documents 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, down from $48 million the year before. By the end of the third quarter, Getaround had $27.2 million in cash to play with.
The merger would have brought the company another $228 million in gross proceeds to stay in business and reach the next stage of growth. Despite the near-term cash inflow, Getaround stood by its decision to cut its workforce, saying it has “a multi-year view of the responsible fiscal actions necessary to maximize the use of proceeds in the face of an unclear economic environment.”
This article has been updated with more information from Getaround.
