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Hospitality start-up Sonder this week cut 21 per cent of its corporate employees and seven per cent of its front-line staff as part of a restructuring designed to increase its cash flow, the company announced this week.
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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.
Future growth of the San Francisco-based company will now be driven primarily by opening units for which it has already signed contracts, executives said, in countries where it already operates – including the UK and Ireland.
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 prioritises cash flow positivity," he said.
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 US$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 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.