Planet will cut off 10% of its workforce to focus on the best ROI possibilities
Planet, a satellite imaging firm, revealed that it is cutting off 117 people. It is around 10% of its current workforce. CEO Will Marshall states that eliminating workers came after “a deep assessment of our business and spending.” The planet is now focused on growing revenue in the face of a protracted slowdown in the public markets.
“Our business has scaled rapidly and continues to grow apace, but the expansion of projects has also increased cost and complexity, which slowed us down in some regards,” CEO Will Marshall said. “We are making changes to prioritize our attention on the highest ROI opportunities for our business and mission, while reinforcing our path to profitability, consistent with what we shared on our prior earnings call.”
Collaboration with SPACs:
Planet went public in December 2021 after uniting with a unique purpose acquisition company, or SPACs. Their public offering was part of a massive surge in SPAC IPOs. However, most of the space firms that went public in this manner failed miserably to meet revenues. Planet is a noticeable standout among this population. It is constantly reporting increased sales around the upper end of its expectations. However, operational costs have been significant, and the firm has yet to attain profitability.
“I want to be clear that I am responsible for the decisions that led us here,” Marshall said. “I know this has significant effects on the lives of our team and their families, and for that I am sorry. We do not make these changes lightly.”
Planet’s Reduction in Working Force:
Th business is expanding, with sales increasing 31% year on year (YoY) in the first quarter of the current fiscal year. After the quarter, the firm had 903 subscribers, with 90% on yearly or multi-year subscriptions. Its non-GAAP gross margin has also increased, standing at 53% for the fiscal year that ended on January 31, up from 38% the previous year. However, Planet reduced its sales guide for the year from $248 million to $268 million to $225 million to $235 million. It has lowered its year-end growth expectation from 35% to 20%. Last quarter, Marshall warned investors that sales bookings were lower than projected. He said customers were facing budget uncertainty and lengthier government procurement timelines. He states that Planet will reduce spending to meet its target of achieving adjusted EBITDA profit by the fourth quarter of next year. Planet says that departed employees will be paid for at least 14 weeks.
“I want to be clear that I am responsible for the decisions that led us here. I know this has significant effects on the lives of our team and their families, and for that I am sorry. We do not make these changes lightly,” Marshall said.