LiveTiles regrouted with second CEO change in 12 months

LiveTiles regrouted with second CEO change in 12 months

Shareholders in employee experience (EX) software group LiveTiles (ASX: LVT) will be ruing their rejection of plans to delist the company last year, with shares continuing their downward spiral today amidst a second CEO shake-up within 12 months and an axing of 48 jobs. 

LVT shares fell 22 per cent this morning to 0.7 cents per share (cps), which is almost one tenth of their 6.7cps level 12 months ago when LiveTiles was just weeks away from announcing the completion of an operational review, which led to the departure of co-founder and executive director Peter Nguyen.

In November, LiveTiles co-founder Karl Redenbach stepped away from the CEO role he had held since starting the business in 2014, although he has stayed on as executive director. Former Salesforce executive David Vander then took the helm to lead the Melbourne-founded, New York-based company.

But the leadership stint will be short-lived for Vander, who announced his resignation today as part of the next stage in LiveTiles' cost-reduction program and in line with his career objectives. Vander is set to leave the company at the end of his six-month notice period, giving the group time to search for his replacement.

In its FY23 results, LiveTiles reported its first round of cost cutting and restructuring led to operational savings of $14.1 million by pausing R&D partnerships, reducing headcount and scaling back the aggressive marketing activities seen in the prior year with total sales and marketing spend slashed by 60 per cent to $5.7 million.

This was not enough however to prevent earnings tipping into the red with a negative EBITDA of $3.5 million and a massive 42 per cent fall in operating revenues to $30.6 million.

LiveTiles is now going further in its restructuring, cutting back 48 roles between full-time employees and contractors, transitioning certain roles to lower-cost locations and exiting non-core office spaces, reducing spending on IT, marketing and professional fees, and implementing an organisational restructure globally.

"In this turbulent macroeconomic environment, we are experiencing softer sales volumes and lengthened deal cycles, which is impacting our revenues," says Vander.

"Overall, this program will enable us to save $16.2 million in annualised costs and $8.4 million in FY24.

"We have recognised these conditions and decided to accelerate efforts to achieve positive cashflow in the second half of this financial year."

Vander says these changes will give LiveTiles additional leverage in FY24, positioning it for improved financial performance in the future.

"This program will enable us to focus on our core as the digital workplace arena. We remain steadfast in our commitment to clarity and attractiveness in our value proposition," he says.

"These choices have not been easy, but we firmly believe that this cost-reduction program will put us in a stronger financial position and situate the business for a sustainable future.

"LiveTiles continues to hold strong customer connections, passion for our market-leading product and a clear path to claiming share of a multibillion-dollar software market. We remain committed to delivering outstanding employee experience software solutions while adapting to changing market dynamics."

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