Planet’s somewhat-predictable headcount reduction

Planet’s decision to lay off 10% of its workforce did not come as a complete surprise following Q1 results that saw the company lower FY24 revenue and AEBITDA by 11% and 49%, respectively, citing extended sales cycles and declining deal values. During the call, management indicated that it expected to exit FY24 with run rate savings of $35 million/year by “significantly throttling back its headcount expansion plans.” Apparently, the foot is off the accelerator and now on the brakes.

Compared to other remote sensing companies (and especially those that deSPAC’d after covid), Planet grew its headcount considerably faster – adding as many employees as BlackSky, Maxar, and Satellogic did altogether between 2021 and 2022 – while facing the same macroeconomic headwinds. This made the company more vulnerable to layoffs, not that they are unique – rival Satellogic let go 18% of its employees in late 2022 and another 8% in the first quarter of 2023.

Notably, Planet is taking these actions from a position of relative strength. At the close of Q1, Planet held $376 million of net cash, and we are forecasting Planet to burn an incremental $116M through FY25. Many of Planet’s peers are not as fortunate and may use Planet’s actions to justify reexamining their staffing and spending levels.

SOURCE: https://www.planet.com/pulse/a-note-from-our-ceo/