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Leafly (Nasdaq: LFLY), an online cannabis information resource and marketplace, announced Tuesday that it would cut 21% of its workforce as part of new cost-saving measures.
The company said the news would affect 56 positions, which would be eliminated through layoffs and attrition. Leafly expects a one-time cash restructuring charge for the layoffs of about $500,000 in the fourth quarter.
In addition, the company realigned its cost structure in response to changing market conditions, resulting in additional expected cost savings.
Overall, annual cash savings are expected to be $16 million beginning in 2023, primarily due to reduced headcount.
These cost-cutting measures allow the company to prioritize growth opportunities, realign its expense structure, and preserve capital while strengthening its financial position, the company said in the news release.
“These reductions will help preserve our ability to respond to opportunities as this industry continues to mature and expand, and allow us to more effectively manage our capital,” CEO Yoko Miyashita said. “In addition to cutting costs, we have taken a close look at our structure to ensure we are prioritizing the most meaningful parts of the business.”
Chief Operating Officer Sam Martin also will depart the company, effective Dec. 31.
Preliminary Third Quarter Financial Results
In preliminary financial guidance for the third quarter, Leafly expects revenue to reach $11.8 million. This is up roughly 8% year over year, but down 2.5% from the second quarter.
Adjusted EBITDA loss is expected to be in the range of $5 million-$6 million.
The company reported taking a “more conservative view” of the second half of 2022 when it released its second-quarter results in August. At that time, Leafly also announced a hiring freeze in response to the macroeconomic conditions.
“We made progress in the quarter on our long-term objectives. Concurrently, we have encountered challenges in our less mature markets and seen signs that customers are more cautious with their ad budgets,” CFO Suresh Krishnaswamy said at that time. “We remain focused on our execution and managing our expenses carefully.”
Leafly plans to release its full third-quarter financial results on Nov. 10.
