Over the past year, Austin-based technology company Phunware Inc. has replaced its long-time founder and CEO, as well as its chief financial officer. Now, as it looks to cut costs, it is planning to lay off a third of its workforce.
The company will lay off 32 full-time employees by the end of July, according to a July 20 filing with the U.S. Securities and Exchange Commission.
Phunware (Nasdaq: PHUN) said the move is intended to help it refocus "on its most promising revenue generating opportunities" and that it will save the company $5 million per year.
"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 stated. "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."
The company also said it would streamline operations and cut non-essential expenses.
Phunware did not respond to a request for comment.
Phunware was founded in 2009 by Alan Knitowski, Luan Dang and Alan Kane. Its initial focus was on building tools for mobile apps to improve customer engagement. It went on to develop a variety of location-based technologies as well as its own crypto coin and data and gaming analytics. The company went public in 2018 through a merger with Stellar Acquisition III Inc., a special purpose acquisition company based in Athens, Greece.
Shares have fallen significantly from their debut price of $11.50, with the exception of a huge climb in 2019 to around $300 per share after a reported contract with Donald Trump's campaign. The stock fell back to about $6 per share a few months later.
On the afternoon of July 24, shares were trading for 34 cents apiece, giving the company a market capitalization of about $36 million, according to Yahoo Finance data. The company was notified in April that its stock was in danger of being dropped from the Nasdaq because its share price was below $1 for a month.
The company's layoffs follow a series of changes. In October, Phunware announced that Russ Buyse would replace Knitowski. In June this year, the company announced Matt Aune was stepping down after a long tenure chief financial officer, with six months of severance pay. He was replaced by Troy Reisner.
Back in 2019, the company cut 15% of its staff in a restructuring move. Then, a few months later and ahead of its stock surge, the company laid off 18% of its workforce, or 21 people, after its contract with Fox Networks Group ended.
In a May 2023 quarterly filing with the SEC, Phunware noted it has a history of net losses since its founding, and in the first three months of 2023 it incurred a net loss of $4.2 million and used $7.3 million in cash for operations. At the time, the company said its balance sheets "raise substantial doubt about our ability to meet our financial obligations as they become due."
But the company said it remains committed to building products and serving customers.
"We believe these strategic actions will significantly lower our operating costs, improve our financial performance and ultimately enhance shareholder value," Reisner stated. "While these decisions are challenging, they are critical steps on our path to profitability and long-term corporate success."
