Short-term accommodation provider Sonder Holdings this week
laid off 21% of its corporate employees and 7% of its front-line staff as part
of a restructuring designed to increase its cash flow, the company announced
Sonder's upcoming growth now will be driven primarily by
opening units for which it has already signed contracts, executives said, in
countries where it already operates.
Company executives during a Thursday conference call said
they remained optimistic and confident about travel trends, including business
travel, and anticipated strong demand growth during the summer and beyond.
"Nothing we're announcing today has anything to do with our enthusiasm for
the travel market going into the next couple quarters," Sonder president
and CFO Sanjay Banker said.
Sonder co-founder and CEO Francis Davidson positioned the
decision to restructure as a reaction to financial markets. "The market
dynamics have shifted clearly from a growth-oriented market to one that
prioritizes cash flow positivity," he said.
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Affected employees were notified this week of the layoffs,
and the company said it would provide "severance, benefits continuation
and other support to assist departing employees with transitioning to new
Davidson said the front-line staff laid off
"primarily" included personnel working in Sonder contact centers and
in roles associated with unit openings. "It's crucial for us to be able to
deliver on a really high service standard," he said.
According to a Sonder filing with the U.S. Securities and
Exchange Commission, Sonder chief technology officer Satyen Pandya departed his
role June 8.
Sonder said it had at the end of March 7,700 live units
available for booking and another 11,600 under contract to open. The company
indicated it would further expand only in areas that did not require
significant investment to do so, and as such did not plan to enter any
countries in which it did not currently operate.
Davidson and Banker said the company's business and travel
demand remained strong. Sonder projects second-quarter revenue per available
room of about $160, up from $117 in the first quarter and from $100 in the
second quarter of 2021.
The company also forecast second-quarter revenue to increase
about 140% year-over-year, and full-year revenue to increase about 100% to 110% from 2021. Sonder expects to achieve positive cash flow
in 2023 but did not specify further.
Sonder earlier this year went public
through a merger with a special purpose acquisition company.
*This article originally appeared on Business Travel News.