Car-sharing service SPAC Getaround lays off 10% of employees • TechCrunch
Peer-to-peer car sharing company Getaround will lay off 10% of employees starting Thursday. The layoffs are part of a restructuring that aims to put Getaround on a path to “sustainable profitability and long-term growth.” the company said in a statement.
According to LinkedIn, Getaround has 421 employees, so the layoffs will affect about 42 employees. Getaround wouldn’t confirm exact numbers, but a company spokesperson told TechCrunch that the layoffs only affect North American teams across all divisions.
News comes a day later Getaround received a delisting warning from the New York Stock Exchange because its share price was trading too low. Following the company’s announcement, Getaround’s stock spiked 17% in hours from $0.64 in the market near $0.75, but has since stabilized at around $0.65. this increase is still 2.19% today.
The workaround, that participate in the public market in December through a merger with InterPrivate II Acquisition Corp., a special purpose acquisition company (SPAC), said it would also significantly reduce other operational costs such as contract workforce company and outside professional services.
Like most other executives who ordered layoffs over the past year, Sam Zaid, CEO of Getaround, said the restructuring plan was a response to the “short-term macroeconomic outlook.” term uncertainty, which has hit tech companies hard.”
Getaround expects the restructuring to result in cost savings of $25 million to $30 million on an annual run rate basis.
It remains unclear how the company’s decision to go public through the SPAC merger affected the company’s balance sheet. The deal was finalized in Q4 2022, and Getaround has yet to set an earnings date. Regulatory filings show Getaround’s cash burn for the first nine months of 2022 at $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 use.
The merger will give the company a $228 million in total proceeds stay afloat and reach the next stage of growth. Despite the short-term cash injection, Getaround upheld its decision to cut staff, saying it was “looking over the years into the responsible financial actions needed to maximize the use of the cash.” use the proceeds in light of the uncertain economic environment.”
This article has been updated with more information from Getaround.