Social networking app provider Nextdoor said it plans to cut 25% of its full-time workforce, or almost 200 employees, as part of a larger effort to reduce current personnel expenses by up to $60 million annually.
The move will position Nextdoor to break even on quarterly cash flow by the end of 2025, according to Sarah Friar, the company’s CEO. “This reduction in our team is the hardest decision we have had to make at Nextdoor,” Friar said in a Tuesday press release. “While our opportunity and belief in the transformative power of community remains unwavering, and our business is financially strong with a healthy balance sheet, we must follow through on our commitment to our shareholders.”
The San Francisco, California-headquartered company expects the cost reduction plan to result in one-time charges of about $12 million — consisting primarily of cash expenditures for notice period and severance payments, employee benefits, and related costs — and to be “substantially complete” by the end of the fourth quarter, according to a Tuesday Securities and Exchange Commission filing.
Nextdoor also disclosed that Michael Doyle resigned from his position as the company’s CFO, effective Tuesday. Matt Anderson, who most recently served as the company’s head of finance and strategy and investor relations, was named Doyle’s replacement.
Anderson, 36, will receive an initial annual base salary of $475,000 and will continue to be eligible to participate in company-sponsored benefits, according to the SEC filing.
Before joining Nextdoor as head of finance and strategy in July 2019, Anderson served in a similar role at digital payments company Block, previously known as Square, according to his LinkedIn page. He also previously did stints at private equity firm GI Partners and investment bank Barclays.
Doyle is expected to remain at Nextdoor through Dec. 1 to help ensure a smooth transition. The planned departure isn’t a result of any disagreement regarding the company’s financial statements or disclosures, the SEC filing said.
Nextdoor announced the layoff and finance leadership change while releasing its third quarter earnings results. The company reported a net loss of $38 million, compared with $35 million in the year-ago period.
“Starting in Q2 of '22 and continuing into this year, we began to face increasingly challenging macroeconomic headwinds driving reduced advertiser budgets,” Friar said during a Tuesday earnings call.
She said the company “fought hard” to maintain its employee base while hoping for an economic recovery that hasn't yet materialized.
“So we must adapt our investments to better align with market realities and focus our work on our highest priorities, including ensuring that we continue to invest in the areas such as our new ad tech stack,” the CEO added.