Company announces cost cuts as demand returns to pre-pandemic levels.
Website building platform Wix (NASDAQ: WIX) announced a cost reduction plan that includes layoffs today along with its Q2 earnings.
The company said that demand, which shot up during the pandemic, has receded to pre-Covid levels. This echoes what other companies in the space, including Tucows and Verisign, have reported about the demand for the building blocks for websites.
Q2 revenue at Wix was up 9% year over year to $345.2 million. Exchange rates shaved two points off the growth.
Revenue lags bookings, and bookings were up only 3% in the quarter compared to Q2 2021. Exchange rates cut the growth from 7%.
As growth slows, the company says it’s going to focus more on profitability and cash flow. It plans to cut $150 million from its annual expenses. Its operating expenses last year were $1.1 billion, up from $870 million in 2020.
Some of this cost-cutting will come from layoffs. Wix said 25% of the savings would come from its customer care group.
The cost reduction will help the company meet the three-year free cash flow margin guidance it provided to analysts in May. Investors cheered this, pushing the stock up over 10% in morning trading.