Phunware Inc (NASDAQ:PHUN) told investors it plans to realize annual run-rate cost savings of upwards of $5 million through a series of strategic cost cuts aimed at improving its financial performance and positioning it for sustainable long-term success.
In a statement, the company said it has made the “difficult but necessary decision” to reduce its workforce by about 33% across all departments as part of the strategic cost optimization efforts.
The decision was driven by a refocus on its most promising revenue-generating opportunities to ensure its continued success in the rapidly evolving mobile technology landscape and was not a reflection on the dedication or performance of affected team members, it added.
"We deeply appreciate the contributions of all our employees to get Phunware to where it is today, and this decision was not taken lightly," CEO Russ Buyse said.
"We are providing support to those affected during this transition period and we remain committed to treating everyone with respect and dignity. Our focus now is to maximize growth opportunities by concentrating our resources on speeding adoption of our location based-platform in healthcare, hospitality, and beyond."
Other cost-cutting measures aimed at making the company leader and more efficient include streamlining operations, reducing non-essential expenses, and optimizing the use of existing resources to further enhance efficiencies.
"We believe these strategic actions will significantly lower our operating costs, improve our financial performance and ultimately enhance shareholder value," added chief financial officer Troy Reisner.
"While these decisions are challenging, they are critical steps on our path to profitability and long-term corporate success.”
The company said it will provide more detailed information about the cost reduction measures on its upcoming second-quarter 2023 earnings call.
Phunware is a pioneer of location-based Software-as-a-Service. It offers a fully integrated enterprise cloud platform for mobile that enables brands to engage, manage and monetize anyone anywhere.
Contact the author at stephen.gunnion@proactiveinvestors.com