AppFolio plans to lay off a further 149 employees, or nearly 9% of its workforce, in a second round of retrenchments as it struggles to make a profit in a tough operating environment.
The Santa Barbara, California-based company, which makes software for the real estate industry, said its costs have increased considerably but it has not scaled the business effectively. This forced it to make the changes in service of its customer and the long-term health of the company.
In May, the company laid off 62 employees, or about 3% of its workforce at the time.
In a letter to employees on August 17, filed with the US Securities and Exchange Commission, CEO Share Trigg wrote: “Entering 2023, AppFolio was not a profitable business, which limits our ability to achieve our potential.
“To continue to deliver industry-leading innovation that enables our customers to thrive, we must generate enough profit to fuel long-term growth and reinvest in our products, technology, and people.”
Trigg said a reduction in staff is a last resort after the company had taken several steps to lower costs this year, including investing in technology to find efficiencies, shrinking its office real estate footprint, and re-evaluating hiring needs to prioritize only the most critical roles.
“In addition, we’ve focused on aligning the value we provide with the value we receive by no longer waiving fees that bring considerable cost, such as ACH transactions,” Trigg added.
“While we’ve made real progress, these measures are not enough to get us where we want to be.”
The company said it will give affected employees up to three months of non-working transition pay, and they will continue to receive their base salary and benefits during the transition period.
The company's shares were steady in Friday pre-market trade after gaining 1.4% to $166.99 on Thursday.
Contact the author at stephen.gunnion@proactiveinvestors.com