Nextdoor, a popular neighborhood app, is prioritizing its “commitment to shareholders” over its commitment to employees by eliminating a quarter of its staff to meet shareholder expectations, the company said in a 2023 Q3 report Tuesday. The layoffs are reportedly part of an effort to reduce Nextdoor’s personnel expenses by up to $60 million despite a revenue increase of 4% year-over-year.
“This reduction in our team is the hardest decision we have had to make at Nextdoor,” CEO Sarah Friar said in the report. “While our opportunity and belief in the transformative power of community remains unwavering, and our business is financially strong with a healthy balance sheet, we must follow through on our commitment to our shareholders. This means right-sizing our business and aligning our team and other expenses with our near-term revenue expectations.”
A Nextdoor spokesperson told Gizmodo in an email that the workforce reduction will affect roughly 200 employees, and according to the report, it will set the company up to meet its long-term priorities and put it in a position for its quarterly revenue to break even by the end of 2025. The earnings report showed the number of weekly active users increased by 6% this year, reaching 40.4 million people, but the company still reported quarterly losses of $38 million, a $3 million increase from the same time last year.
Nextdoor’s layoffs are just the latest in a steady stream of employee reductions at Big Tech companies since last year including Amazon, Google, Microsoft, Meta, and Zoom, among many others. According to Layoffs.fyi, nearly 249,000 employees were laid off across 1,100 tech companies in 2023 alone, an increase from nearly 165,000 people laid off last year.
Friar said in the earnings call that the company allegedly fought to keep its current employees, believing the macroeconomic challenges it’s faced from reduced advertiser budgets would start to recover by the end of this year. When that didn’t happen, Friar says the company determined it had to adapt its investment strategy “to better align with market realities and focus our work on our highest priorities.”
