Dive Brief:
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E-commerce company Wish, whose corporate name is ContextLogic, plans to reduce its workforce by about 255 employees, according to a Tuesday filing with the Securities and Exchange Commission signed by CEO Joe Yan. The workforce reduction plan, approved by the board last week, is expected to be complete by the end of the fiscal year.
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The move affects about 160 of Wish’s U.S. employees or about 41% of its domestic workforce, and about 95 non-U.S. employees, about 26% of its international workforce, per the filing. They will get severance benefits, including cash payments and health insurance premium reimbursement, for 60 days, per the filing.
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The layoffs are “intended to refocus the Company’s operations to support its ongoing business prioritization efforts, better align resources, and improve operational efficiencies,” per its filing. More context will be provided at an upcoming earnings call scheduled for Thursday, a spokesperson said by email.
Dive Insight:
Wish has been struggling for a while. Amid plummeting revenue, the e-commerce company rebranded a few months after former Foot Locker executive Vijay Talwar’s arrival as CEO. Then Talwar left after just seven months in the job, and Yan, an operating partner at venture capital firm GGV Capital, took over in the interim.
With Yan in the position permanently as of February, the online marketplace has made some progress. Wish returned to app stores and search engines in France, after French regulators lifted a delisting measure against it, and forged several international partnerships to ease shipping. But Q1 revenues fell nearly 50% year over year, and net loss in the period widened to $89 million from $60 million the year before. The company releases its Q2 results on Thursday.
In its filing Tuesday, Wish said it expects to realize run-rate savings of about $43 million to $46 million on an annualized basis starting in the fourth quarter of 2023 as a result of the layoffs.
The company also expects to incur non-recurring charges of about $8.7 million related to WARN Act compliance, severance payments to affected employees globally, and other personnel reduction costs in connection with the workforce reduction plan, mostly in the third quarter.
