Sonder Restructuring to Include Layoffs, Growth Limits | Business Travel News

Summary

This Business Travel News article by Chris Davis, dated June 09, 2022, reports that short-term accommodation provider Sonder Holdings laid off 21 percent of its corporate employees and 7 percent of its front-line staff in a restructuring meant to increase its cash flow. CEO Francis Davidson said market dynamics had shifted from growth to cash flow positivity, and president and CFO Sanjay Banker said the moves did not reflect any lack of enthusiasm for travel. Sonder had 7,700 live units at the end of March and another 11,600 under contract, and it said it would not enter new countries. It projected second-quarter revenue per available room of about $160, up from $117 in the first quarter, and expected positive cash flow in 2023. Sonder went public earlier in the year through a merger with a special purpose acquisition company.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

Procurement

Sonder Restructuring to Include Layoffs, Growth Limits

Accommodation provider cuts corporate roles in bid to increase cash.

By Chris Davis / June 09, 2022 / Contact Reporter

Short-term accommodation provider Sonder Holdings this week laid off 21 percent of its corporate employees and 7 percent of its front-line staff as part of a restructuring designed to increase its cash flow, the company announced Thursday.

Sonder's upcoming growth now will be driven primarily by opening units for which it has already signed contracts, executives said, in countries where it already operates.

Company executives during a Thursday conference call said they remained optimistic and confident about travel trends, including business travel, and anticipated strong demand growth during the summer and beyond. "Nothing we're announcing today has anything to do with our enthusiasm for the travel market going into the next couple quarters," Sonder president and CFO Sanjay Banker said.

Sonder co-founder and CEO Francis Davidson positioned the decision to restructure as a reaction to financial markets. "The market dynamics have shifted clearly from a growth-oriented market to one that prioritizes cash flow positivity," he said.

Affected employees were notified this week of the layoffs, and the company said it would provide "severance, benefits continuation and other support to assist departing employees with transitioning to new roles."

Davidson said the front-line staff laid off "primarily" included personnel working in Sonder contact centers and in roles associated with unit openings. "It's crucial for us to be able to deliver on a really high service standard," he said.

According to a Sonder filing with the U.S. Securities and Exchange Commission, Sonder chief technology officer Satyen Pandya departed his role June 8.

Sonder said it had at the end of March 7,700 live units available for booking and another 11,600 under contract to open. The company indicated it would further expand only in areas that did not require significant investment to do so, and as such did not plan to enter any countries in which it did not currently operate.

Davidson and Banker said the company's business and travel demand remained strong. Sonder projects second-quarter revenue per available room of about $160, up from $117 in the first quarter and from $100 in the second quarter of 2021.

The company also forecast second-quarter revenue to increase about 140 percent year over year, and full-year revenue to increase about 100 percent to 110 percent from 2021. Sonder expects to achieve positive cash flow in 2023 but did not specify further.

Sonder earlier this year went public through a merger with a special purpose acquisition company.

RELATED: Sonder: Corp. Travel Play in 'Early Innings' but 'Huge Opportunity'

More Procurement

Related

American Express Agrees to Acquire Center

American Express has reached an agreement to acquire payment and expense technology provider Center,...

Air New Zealand CEO Foran to Depart

Air New Zealand CEO Greg Foran on Oct. 20 will step down from his role and depart the carrier, the...

Amadeus: Q4 Air Distribution Revenue Spikes Amid 'Gradual' NDC Adoption

Amadeus's global distribution system bookings increased 9 percent year over year to 111.4 million in...

File and source

File

Sonder-Restructuring-to-Include-Layoffs-Growth-Limits_923645a8f2a447fb_wayback.html

Size

60,636 bytes

SHA-256

48520dbe84600520493c40bee8bc4bd6c964d010c5a6d51d8a0e8fdda6d07f10

Our copy

Sonder-Restructuring-to-Include-Layoffs-Growth-Limits_923645a8f2a447fb_wayback.html

Original

No public link identified.