Planet most recently reported $276M in cash, cash equivalents, and short-term investments. But Planet incurred $135M in net loss during the trailing 12 months. At the current burn rate, Planet has about two years of cash left.
With this backdrop, Planet Labs on June 24 filed with the SEC announcing layoff of about 180 employees, or 17% of its workforce. As a worker bee in the sector, other company layoff news is never heartwarming. Planet Labs CEO entrepreneur Will Marshall received over $23 million in compensation (FYs 2021-23) while Planet has posted reoccurring losses. Now he shows more employees the door. But Planet needs to cut costs, or else everyone there risks losing their jobs.
How much money will this latest layoff save? And will it make Planet cashflow positive? Getting at this, Space News reported contacting Planet Labs requesting information about the affected positions and geographic locations. Planet Labs apparently did not answer this request.
But a WARN report filed with the California State government advised the layoff included 98 workers in San Francisco. SFGATE reporting further elucidated these San Francisco workers included “two vice presidents and dozens of engineers.”
Planet Labs, as already mentioned on this site, relies on high labor costs from being headquartered in San Francisco. The fact 98 San Francisco employees were laid off allows some rough calculation of cost savings. Glassdoor has salary information reported for Planet workers in San Francisco. Assuming the fully loaded average salary of the 98 laid off San Francisco workers was $220,000, this equates to roughly $22M in reduced payroll. If the other approximately 80 employees averaged $150,000, this is $12M more saved. This totals to about $34M. (However this will be lower the first year due to a onetime cost of $9.5 -$10.5M cost associated with the layoffs.)
These layoffs will likely not Planet cashflow positive. But all other things equal, Planet now has two years and three quarters until it runs out of cash. So these layoffs buy Planet three quarters more time.