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Online creative marketplace Redbubble (ASX: RBL) has announced its second round of sackings for 2023 with plans to let go of 75 people, or 23 per cent of its current workforce, in order to reduce operating expenditure by $13-15 million.
The news comes within four months of the Melbourne-headquartered company reducing its marketplace workforce by a fifth, taking the total number of staff who have lost their jobs at Redbubble to around 125 since the start of this year, or just over one in every three workers.
Redbubble, which boasts two marketplaces connecting around 700,000 artists worldwide with potential customers for their prints to be sold on products like shirts, pillows, phone cases and more, reported in an ASX announcement this morning that the further cost reduction measures were aimed at accelerating a return to being cash flow positive.
"Since being appointed CEO, my primary focus has been returning the group to profitability as soon as possible," says Redbubble CEO and managing director Martin Hosking, the company's founder who returned to lead the company after Michael Ilczynski's resignation on 27 March 2023. He had previously stepped aside to be a non-executive director in 2018, only to return on an interim basis for a year in early 2020 before Ilczynski was recruited.
"It has become clear that to achieve this, we need to further reduce our cost base. As a result, we have made the difficult decision to remove a number of roles from the group.
"As part of this process, we have restructured our business to more clearly define the group function and two operating companies, Redbubble and TeePublic. We expect this new structure will allow each marketplace to operate more efficiently and effectively, with a greater focus on their individual strengths and unique value propositions."
He highlights the company has ensured it will retain the necessary capability to continue to make targeted investments in initiatives "which have delivered, or we anticipate will deliver a financial benefit in the near term".
"We believe that the steps we are taking today will best position us to bring forward our return to cash flow positive," Hosking says.
"Once achieved, we will be on a strong footing to explore future growth opportunities to unlock the group’s tremendous potential."
Redbubble now expects an operating expenditure for FY23 of $125-130 million, not including one-off restructuring costs of approximately $5.1 million.
Elsewhere in the Australian tech space, artificial intelligence annotator Appen (ASX: APX) - a global group based in Sydney which draws on more than one million flexible workers to collect data and help train and evaluate AI models - has announced a "soft start" to 2023 with revenue down by more than 21 per cent for the year to date.
Against this backdrop and following $10 million in cost savings identified in late February, Appen has today revealed it will undertake a series of unspecified measures that will deliver a further $36 million in annualised cost savings. The cost of those measures is expected to be a one-off $4-5 million.
Two weeks ago Sydney-based online services marketplace Airtasker (ASX: ART) announced it would be laying off 20 per cent of its global workforce as part of cost cutting measures, following other high-profile rounds of redundancies and sackings from Perpetual (ASX: PPT), Fortescue Metals Group (ASX: FMG), Culture Amp, Atlassian, Swyftx, Mr Yum and others.
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