Car-sharing SPAC Getaround lays off 10% of staff
Peer-to-peer car-sharing company Getaround is laying off 10% of staff starting Thursday. The layoffs are part of a restructure aimed to put Getaround on the path to “sustainable profitability and long-term growth,” the company said in a statement.
Per LinkedIn, Getaround has 421 employees, so the staff cuts should affect around 42 employees. Getaround would not confirm the exact number, but a spokesperson for the company told TechCrunch the layoffs exclusively 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 has been trading too low. Following the company’s announcement, shares of Getaround spiked 17% after hours from $0.64 at market close to $0.75, but have since settled to around $0.65, which is still a 2.19% increase today.
Getaround, which joined the public markets in December via a merger with InterPrivate II Acquisition Corp., a special purpose acquisition company (SPAC), said it would also significantly reduce other operating expenses like the company’s contract workforce and outside professional services.
Like almost every other executive over the past year who has ordered layoffs, Sam Zaid, Getaround’s CEO, said the restructuring plan is a response to “an uncertain near-term macroeconomic outlook, which has hit technology companies particularly hard.”
Getaround expects the restructuring to result in cost savings of between $25 million and $30 million on an annualized run-rate basis.
It’s not yet clear how the company’s decision to go public through a SPAC merger has affected its balance sheets. The deal was finalized in the fourth quarter of 2022, and Getaround has yet to set a date for its earnings release. Regulatory filings 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, which is a decrease from $48 million the year prior. By the end of Q3, Getaround had $27.2 million in cash to play around with.
The merger would have brought the company another $228 million of gross proceeds to stay in operation and achieve its next phase of growth. Despite the near-term infusion of cash, Getaround stood by its decision to cut staff, saying it is “taking a multi-year view of the responsible fiscal actions required to maximize the use of proceeds in the face of an unclear economic environment.”
This article has been updated with more information from Getaround.
Car-sharing SPAC Getaround lays off 10% of staff by Rebecca Bellan originally published on TechCrunch