The company announces cost cuts as demand returns to pre-pandemic levels.
Website building platform Wix (NASDAQ:WIX) announced a cost-cutting plan that includes layoffs today as well as its Q2 results.
The company said demand, which had increased during the pandemic, had returned to pre-Covid levels. This echoes what other companies in the industry, including Tucows and Verisign, have reported on demand for building blocks for websites.
Wix’s second quarter revenue increased 9% year over year to $345.2 million. Exchange rates slashed growth by two points.
Revenue is lower than bookings, and bookings were only up 3% in the quarter compared to the second quarter of 2021. Currency exchange rates reduced growth by 7%.
As growth slows, the company says it will focus more on profitability and cash flow. It plans to cut $150 million in annual spending. Its operating expenses were $1.1 billion last year, down from $870 million in 2020.
Part of this cost reduction will come from layoffs. Wix said 25% of savings will come from its customer service group.
The cost reduction will help the company meet the three-year free cash flow margin guidance it provided to analysts in May. Investors cheered that, sending the stock up more than 10% in morning trading.