Latch, a proptech smart lock company that raised $152 million in known private capital before debuting on the stock market through a SPAC last year, is conducting another round of layoffs. Earlier this month, the startup cut 30 people, or 6% of its total staff, per an email obtained by TechCrunch.
Now, as confirmed by a late Friday press release, Latch announced that it has cut a total of 130 people, or 28% of its full-time employee base. Sources say the cuts impact chief revenue officer Chris Lee and VP of sales Adam Sold.
In the email viewed by TechCrunch, Latch CEO Luke Schoenfelder told staff that the first round of layoffs were conducted to “ensure Latch is on a path to sustainable growth.” He also said that Latch will be reducing some areas of the business, but unsure if that means cutting entire products or just shrinking resources behind each vision. TechCrunch reached out to Latch about this week’s layoffs but has not yet heard back at time of publication.
Two consecutive weeks of layoffs is rare, if not indicative of frantic behind-the-scenes operations. In this case, it feels like back-to-back knee jerks come after weeks of tension. In April, Latch CFO left the company less than a year after he assumed the role and after taking the company public through a reverse-merger. At the time, TechCrunch outlined the broader SPAC meltdown — and explained that Latch wasn’t immune.
For example, Latch’s opening price, per Yahoo Finance, was $11 per share. It now trades at a little over $2 per share; representing a more than 80% decrease in value since its June 2021 debut. Such an extreme drop in value, and investor confidence, can force a company to rapidly cut costs in order to show that it’s able to get to a leaner state.
Once the workforce reduction is complete, Latch expects to achieve around a $40 million annual run rate cost savings across research and development, sales and marketing and general and administrative expenses, a press release says. The layoffs and restructuring will cost approximately $4 million to $6 million of total cash restructuring, which the company expects to spend in the second quarter of 2022.
As we’ve seen over the past month, both public and private tech companies are announcing mass layoffs across sectors. Employees from Section4, Carvana, DataRobot, Mural, Robinhood, On Deck, Thrasio, MainStreet and Netflix have been impacted by the workforce reductions. Some bigger companies are instituting hiring freezes, such as Twitter and Meta, or announcing a shift in strategy, such as Uber.