Layoffs as growth slows — Wix plans

Firm discloses cost cuts as demand returns to pre-pandemic levels.

Chart showing bookings at Wix, which were up 3% in Q2 compared to the same quarter in 2021.

Website building platform Wix (NASDAQ: WIX) disclosed a cost reduction plan that includes layoffs today along with its Q2 earnings.

The firm stated that demand, which shot up during the pandemic, has receded to pre-Covid levels. This echoes what other firms in the space, counting Tucows and Verisign, have noted regarding the demand for the building blocks for websites.

Q2 revenue at Wix was up 9% year over year to $345.2 million. Exchange rates shaved two points off the growth.

Revenue lags bookings, and bookings were up only 3% in the quarter compared to Q2 2021. Exchange rates cut the growth from 7%.

As growth slows, the firm states it’s going to focus more on profitability and cash flow. It plans to cut $150 million from its annual expenses. Its operating expenses last year were $1.1 billion, up from $870 million in 2020.

Some of this cost-cutting will come from layoffs. Wix stated 25% of the savings would come from its client care group.

The cost reduction will help the firm meet the three-year free cash flow margin guidance it provided to analysts in May. Investors cheered this, pushing the stock up over 10% in morning trading.

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