US: Next-generation lodging firm Sonder is making around 100 corporate employees redundant, amounting to close to 14 per cent of the startup’s overall workforce.
The news was revealed by Francis Davidson, co-founder and CEO of Sonder, in the startup’s earnings call on Wednesday. The layoffs are set to take effect at the end of the first quarter next month.
It represents the latest layoff round at Sonder after the company let go of 21 per cent of its corporate team and seven per cent of its frontline staff last June as part of a restructuring across the organisation. Prior to that, Sonder cut its workforce by 22 per cent and furloughed an additional 11 per cent of its staff at the start of the Covid-19 pandemic.
Despite the announcement, the San Francisco-based firm maintained its optimism and confidence about the future of travel and long-term sustainable growth, as Sonder prioritises increasing its cash flow and “expanding into new industry segments”.
At the same time, Sonder reported an increase in Q4 revenue from $86.7 million in 2021 to $135 million in 2022, RevPAR grew 11 per cent from the previous year’s fourth quarter to $158, and occupancy stabilised relatively at 83 per cent.
By the end of Q4, Sonder also achieved a 28 per cent year-on-year growth in live units – more than 9,700 units are listed and operated by the startup, compared to approximately 5,000 at the start of the pandemic.
Looking ahead, Sonder will double down on its corporate market focus in 2023, having launched on the Global Distribution System [GDS] in 2021 and added “a significant amount of corporate travel accounts”, according to Davidson.
Sonder went public last January via a business combination with special purpose acquisition company [SPAC] Gores Metropoulos II, when it was valued in the region of $1.9 billion.
In the process, Sonder raised approximately $310 million in PIPE [private investment in public equity] capital from leading investors, including affiliates of Gores Metropoulos II, Fidelity Management & Research LLC, and funds and accounts managed by subsidiaries of BlackRock, Atreides Management, LP, and Senator Investment Group.