Latch, Inc. (NASDAQ: LTCH), maker of LatchOS, the full-building enterprise software-as-a-service (SaaS) platform, today announced a plan to create further operating efficiencies, including through the completion of an additional workforce reduction. Under this plan, Latch will renew its focus on higher margin activities with customers, continue to grow new high margin recurring revenue, and more closely align its organizational structure with the size and focus of the business.
The expected increase in operating efficiencies under this plan, in conjunction with the changes announced in May 2022, are expected to result in approximately $85 million to $95 million in total annualized operating savings once fully completed. Latch estimates annualized operating expenses and capital expenditures of $65 million to $75 million following the completion of these changes.
The August workforce reduction impacts approximately 115 people, or approximately 37% of Latch’s current full-time employees. The reduction is expected to result in approximately $2.5 million to $3.5 million of total cash restructuring and related charges primarily related to severance and benefits costs (excluding the impact of share-based compensation), substantially all of which is expected to be incurred in the third quarter of 2022.
Latch’s guidance provided in its first quarter earnings release does not reflect the changes announced today or the workforce reduction and reorganization announced in May 2022. Accordingly, such previous guidance should not be relied upon. Latch intends to provide further information about these cost-savings efforts in connection with the release of Latch’s second-quarter earnings.