Shares of Bark (NYSE:BARK) are down 11% today after the pet retailer issued disappointing earnings and announced that it is laying off 126 employees or 12% of its workforce.
Bark, an e-commerce company that sells pet product subscription boxes, is the latest in a string of technology companies to announce significant job cuts since the start of the year. The headcount reduction at Bark comes as the company reported a net loss of nine cents per share for its most recent quarter, which was in line with Wall Street estimates.
Prior to today’s selloff, BARK stock had declined 52% over the last 12 months to $1.96 per share.
What Happened
In a news release, Bark said that it is trying to achieve $12 million in annual cost savings. To that end, the company is cutting its full-time staff by 12% or 126 employees. Bark said it will also limit the use of third-party vendors, consultants, and contractors moving forward. The company said the cost-cutting moves will help it to eventually reach profitability.
Bark added that the workforce reduction will result in a charge of $2 million in its fiscal fourth quarter due primarily to employee severance payments. The cost-cutting measures come as Bark announced that its revenue for its most recent quarter totaled $134.3 million, down 5% from the same period a year ago. The company announced a net loss of $21.3 million, which was 61% greater than the net loss of $13.2 million posted a year earlier.
Why It Matters
Bark is the latest technology company to cut staff as it contends with difficult macroeconomic conditions. So far in 2023, 334 tech firms have laid off more than 100,000 workers, according to the website Layoffs.fyi, which tracks job cuts in the industry. Companies ranging from Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) to Intel (NASDAQ:INTC) and Meta Platforms (NASDAQ:META) have announced sizable staff cuts recently.
At the same time that Bark announced its layoffs, privately held Yahoo said that it is cutting 20% of its staff, which is equivalent to 1,600 workers. Analysts say the steady drumbeat of layoffs indicates that the U.S. economy is fragile at the moment and add that job cuts in the tech industry could spread to other sectors in coming months as the impact of higher interest rates works its way through the economy.
The layoffs are also impacting regional economies in areas such as Silicon Valley, as well as cities such as San Francisco and Boston that have high concentrations of tech workers.
Bark Layoffs: What’s Next
BARK stock takes a hit today on news of its disappointing earnings and job cuts. More broadly, layoffs in the tech industry continue unabated, which is beginning to weigh on investor sentiment and leading some market commentators to speculate that a dot-com crash 2.0 might be headed our way. Be careful out there.
On the date of publication, Joel Baglole held a long position in GOOGL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
