Israeli web analytics company SimilarWeb (NYSE: SMWB) announced yesterday in its third quarter financial results that it is laying off 10% of its workforce. As of May 2022, SimilarWeb had 1,250 employees including 700 in Israel after significantly growing its workforce over the past few years. 120 employees are being laid off.
SimilarWeb has developed a platform for measuring, examining and predicting user behavior on the web.
SimilarWeb CEO Or Offer wrote to employees, "We believe that the factors that have led to our performance to date may not continue in the short term for a number of reasons. Looking back to the start of the pandemic in 2020, the global economy has progressed much more positively than expected. The transition to remote work has become possible and accelerated initiatives that support digital transformation, which have led to our further growth. We experienced high growth rates throughout 2020 and 2021 relative to what we had experienced previously. Our annual revenue has nearly doubled and we are focused on continuing that rapid growth. As a result, we had designed and built our operational infrastructure in anticipation of supporting much higher recurring revenue in 2022. In recent months, the beneficial conditions that we had taken into account in our plans, have started to deteriorate. Now, towards 2023, we feel that parts of the world may go into recession.
"Along with our clients, we are not immune to the reality of inflation, interest rate hikes, the energy crisis and geopolitical conflict that has contribute to a slowdown in the global economy. To succeed in such an environment we must adjust our priorities and change our focus. We are accelerating the plan to reach a positive cash flow in 2023. Accordingly, we need to adjust our cost structure. Today we are announcing the most difficult change we have ever had to make at Similarweb. We are reducing the size of our team by approximately 10% and parting ways with many talented people. We believe these actions will position us well."
Investment bank Jefferies has cut SimilarWeb's target share price from $18 to $8, which is still 20% higher than the company's closing price on Wall Street last night.
In the third quarter of 2022, SimilarWeb reported revenue of $50 million, up 41% from the corresponding quarter of 2021. GAAP operating loss was $21 million, up from $17.3 million in the third quarter of 2021.
Published by Globes, Israel business news - en.globes.co.il - on November 16, 2022.
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