NerdWallet, a US personal finance company, has announced plans to cut staff in an effort to lower operating costs.
As revealed in its second quarter 2024 financial results, the company’s restructuring plan will reduce its full-time workforce by approximately 15% compared to its headcount as of 31 December 2023.
The company anticipates a pre-tax restructuring charge of roughly $8m to $10m as part of the plan. This charge mainly covers severance, employee benefits, and related expenses for those affected.
Most of these charges are expected to occur in the third quarter of fiscal year 2024, with the workforce reduction largely completed by the end of that quarter. Annual cost savings from the restructuring are projected to be approximately $30m.
Anticipated charges and projected savings depend on several assumptions, including compliance with legal requirements in various jurisdictions, the impact of workforce reduction on business operations and future investment opportunities.
However, NerdWallet has stated that this decision will allow it to execute its long-term strategic initiatives.
In terms of financial results, the company reported revenue of $150.6m. Despite this, it recorded a GAAP loss from operations amounting to $9.6m, translating to a GAAP net loss of $9.4m, or $0.12 per diluted share. On a non-GAAP basis, the company posted an operating loss of $2.7m.
Tim Chen, Co-Founder and CEO of NerdWallet, said: “This quarter we met our topline expectations, delivering revenue of $151m, up five percent year-over-year, even as we hit an air pocket as banking decelerated, but we fell short of our guidance for non-GAAP operating income due to unexpected headwinds in organic search traffic.
“We are seeing early signs of recovery and continue to believe we have a path to achieving our mid- and long-term targets we issued in March of this year as the insurance market normalises and the lending environment loosens.
“At the same time, we remain focused on efficiency and will be investing more in our most important long-term strategic priorities, including vertical integration and our paid membership offerings.”