Wix embarks on cost-cutting quest as economy takes a dive

Date:
Thu, 11 Aug 2022 13:13:32 +0000

Description:
Wixs cost reduction scheme will span three years, as website builder
scrambles to hit free cash flow target.

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Popular website builder Wix has begun implementing cost reduction measures in a bid to achieve $150 million in annualized savings.

With effects of high inflation materializing and a potential recession on the horizon, Wix says in its Q2 financial report that these savings are not one-time in nature and will continue to be realized on a run-rate basis.

The ultimate goal for the Israeli website builder is to achieve the free cash flow targets that were set by the company back in May 2022. Website builder cuts back

Approximately 20% of Wixs annualized savings are expected to be realized already in 2022, without any reduction to the companys user acquisition marketing investments.

A large portion of these savings will stem from efforts to right-size the workforce and future hiring targets across multiple functions, while the rest will come from changes to operating expenses.

TechRadar Pro reached out to Wix for clarification on whether the right-sizing of its workforce could mean potential redundancies, but the company is yet to reply. Wix currently has around 5,000 employees across twelve countries.

Lior Shemesh, CFO at Wix, explained that the cost saving exercise would continue even if market conditions were to improve next year. Read more

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Overall, Wixs total revenue in the second quarter of 2022 was $345.2 million, up 9% year over year.

We are pleased with our fundamental business improvement this quarter as Wix continues to be the go-to platform for any type of user and any type of business globally, said Avishai Abrahami, Wix Co-founder and CEO.

"The strong results of our growth initiatives continue. Despite the current macroeconomic environment, we are 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 on our three-year financial plan, enhancing our differentiated business model and delivering innovative capabilities for our users to drive shareholder value." Building a website? Check out the best web hosting service providers for you site



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Link to news story: https://www.techradar.com/news/wix-embarks-on-cost-cutting-quest-as-economy-ta kes-a-dive/


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