Wix is cutting costs and we know why. Well-known website builder Wix has started implementing cost-cutting measures in an effort to save $150 million annually.
These savings are not one-time in nature and will continue to be gained on a run-rate basis, according to Wix. Wix states this in its Q2 financial report with consequences of high inflation beginning to materialize. There is a potential recession on the horizon.
The free cash flow targets that the company set back in May 2022 are the ultimate objective.
Website builder wix is cutting costs
Without any reduction in the company’s investments in user acquisition marketing, almost 20% of Wix’s annualized savings are anticipated to be achieved already in 2022.
The right-sizing of the workforce and future hiring goals across different areas will account for a sizable percentage of these savings. With operating expense changes accounting for the remainder.
Wix has not yet responded with clarity on whether the right-sizing of its personnel could result in potential layoffs. Wix presently employs almost 5,000 people in twelve different countries.
Wix’s CFO, Lior Shemesh, said that the cost-cutting initiative would continue even if the business situation improved the next year.
The overall revenue for Wix increased 9% year over year to $345.2 million in the second quarter of 2022.
“We are pleased with our fundamental business improvement this quarter. Wix continues to be the go-to platform for any type of user globally,” said Avishai Abrahami.
“The strong results of our growth initiatives continue. Despite the current macroeconomic environment, we focused on what is under our control. Driving operational efficiencies to accelerate our path to profitability while continuing to execute on growth initiatives. Such as launching the new Wix Editor this quarter. We remain committed to executing our three-year financial plan. Enhancing our differentiated business model, and delivering innovative capabilities for our users to drive shareholder value.”
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