Seattle-based digital cannabis marketplace Leafly Holdings Inc. (Nasdaq: LFLY) is reducing its headcount by about 40 employees, or 21%.
Leafly disclosed the reduction in its fourth quarter and full-year 2022 financial results, released Thursday. The company said both layoffs and attrition will contribute to the reduction, which the company expects to complete by the end of the quarter. Leafly in October announced a separate reduction of 56 employees, also through layoffs and attrition.
“Given the continued pressure on our topline growth, we made the difficult decision to trim our workforce,” Suresh Krishnaswamy, Leafly's chief financial officer, said in a release announcing the financial results. “With these reductions, in addition to those we made in 2022, we are emphasizing efforts to align more closely with customers and highlighting the value that Leafly can provide."
Leafly expects costs of about $700,000 due to severance and other benefits. It expects annual savings of about $8 million starting in the second quarter.
Leafly, founded in 2010, allows consumers to research and shop for cannabis products online and for cannabis dispensaries to boost business through Leafly's website. The company went public in February 2022 through a merger with a special purpose acquisition company. Yoko Miyashita, the company's CEO, took over the role in 2020 after previously serving as Leafly's general counsel.
In its financial results, Leafly said it generated $47.4 million in revenue in 2022, a 10% year-over-year increase. Its fourth quarter revenue, however, was $12.1 million, which was flat compared with the fourth quarter of 2021. Leafly's average monthly active users decreased from 8.7 million in the fourth quarter of 2021 to 8 million in the fourth quarter of 2022.
"We’ve been intently focused on managing our expenses and cash flow," Miyashita said in the release. "With softer ad spend expected to continue in 2023, we are driving deeper relationships with our customers and optimizing teams for efficiency."
