Marijuana e-commerce platform Leafly Holdings this week laid off another 40 employees, or 21% of its workforce, a day before reporting its full-year and fourth-quarter financial results.
The job cuts came as Leafly reported $47.4 million in revenue for 2022, a 10% increase from 2021, according to a Thursday news release about the Seattle-based company’s earnings.
Operating costs, however, climbed more than 40% last year, although Leafly did manage to turn a profit of more than $5 million in 2022.
“We’ve been intently focused on managing our expenses and cash flow,” Leafly CEO Officer Yoko Miyashita said in a statement.
“With softer ad spend expected to continue in 2023, we are driving deeper relationships with our customers and optimizing teams for efficiency.”
The Wednesday workforce reduction comes after Leafly laid off 56 employees last October.
There have been widespread layoffs across the North American cannabis industry in recent months as companies scramble to cut costs after marijuana price compression, softer sales growth and the difficulty of accessing capital.
That trend is expected to continue well into 2023.
Leafly’s earnings report also showed that total operating expenses increased 43% in 2022 compared with 2021, from $48.7 million to $69.5 million.
The company attributed the increase to the costs associated with new hires and operating as a public company.
Leafly went public on the Nasdaq (LFLY) in February 2022.
The company’s net income for 2022 was $5.1 million, compared with a net loss of $12 million in 2021.
At the same time, Leafly reported:
- An adjusted EBITDA loss of $23.2 million compared with $9.4 million in 2021.
- A net loss in the fourth quarter of $5.8 million compared with $5.1 million in 2021.
The headcount reduction is expected to cost the company approximately $700,000 but will result in cost-savings of $8 million beginning in the second quarter.
A Leafly spokesperson confirmed to MJBizDaily that employees were notified of the layoffs via email Wednesday.
“We are experiencing times of significant change and uncertainty in the cannabis industry,” Miyashita noted.
“Over the past several months, we’ve seen our revenue come under additional pressure with a weaker holiday season and a slower start to 2023 than anticipated, as clients reduced their advertising spend.
“Our customers are in belt-tightening mode and that necessarily impacts their spend on Leafly.”
Employees were advised that their job status was not affected if they had not received a meeting invitation with leadership and human resources by 10:30 a.m. PT Wednesday.
“Transitions like this are very difficult as the impact is felt by our teammates, colleagues, and friends,” Miyashita wrote.
“People we have come to know and partnered with through the ups and downs at Leafly.
“I fully acknowledge that and I am deeply sorry for the circumstances that have led to this outcome.” (Full Story)