US: San Francisco-based hospitality start-up Sonder has laid off 21 per cent of its corporate employees and seven per cent of its frontline staff, as part of a restructuring.
The restructuring is designed to increase its cash flow and the company’s growth will continue by opening properties from its already-signed contracts, including four new properties in the capital this year.
Sonder president and CFO Sanjay Banker said: “Nothing we’re announcing has anything to do with our enthusiasm for the travel market going into the next couple quarters.”
Sonder cofounder and CEO Francis Davidson added the decision was a reaction to financial markets: “The market dynamics have shifted clearly from a growth-oriented market to one that prioritises cash flow positivity.”
Davidson and Banker said the company’s business and travel demand remained strong. Sonder projects Q2 revenue per available room of about US$160, up from $117 in Q1 and from $100 in Q2 of last year.
The company also forecasts Q2 revenue to increase about 140 per cent year over year, and full-year revenue to increase about 100 per cent to 110 per cent from 2021. Sonder expects to achieve positive cash flow in 2023 but did not specify further.
Sonder started the year by going public in a merger with special purpose acquisition company (SPAC) Gores Metropoulos II.
It also recently announced the expansion of its serviced apartment offering in Edinburgh and its growth across Europe with the opening of two hotels in Spain.
The company is providing severance, benefits continuation and other support to help staff it has laid off.
