Valens Semiconductor laying off 15% of workforce as pace of bookings slows significantly
Valens Semiconductor laying off 15% of workforce as pace of bookings slows significantly
The Israeli automotive chip company, which is currently traded with a market cap of $240 million after going public at a $1.1 billion valuation, also cut its guidance for the rest of the year
Valens Semiconductor, which provides connectivity solutions for the audio-video and automotive markets, announced on Thursday that it plans to cut its workforce by 15% to improve operational efficiency. As of the end of 2022, Valens employed a little over 300 people, meaning over 40 employees are set to be laid off.
Valens also cut its guidance for the rest of 2023. The company said its third quarter revenues are now expected to reach a bottom, and to range between $14.0 million and $14.2 million, with recovery expected in the fourth quarter.
Full year 2023 revenues are now expected to range between $83.8 million and $84.2 million, well below the range of $97 million to $100 million it predicted last month. Adjusted EBITDA loss in 2023 is now expected to be in the range of $18.3 million to $16.5 million compared to the range of $15.4 million to $13.6 million it forecast in May.
The company reiterated that it remains on track to achieve adjusted EBITDA breakeven by the end of 2023, but didn’t repeat its expectation to be cashflow positive starting in 2024.
As of the end of March, the company’s balance sheet included $139.7 million in cash, cash equivalents and short-term deposits, and no debt.
"Today we are launching a plan to improve Valens Semiconductor's operational efficiency. The more efficient use of our R&D and other operational resources will allow us to improve our progress toward profitability in the continued uncertain macroeconomic environment," said Gideon Ben-Zvi, CEO of Valens Semiconductor. "As we approach mass production availability of several new products for automotive and audio-video, we can now benefit from streamlining our development platforms."
Ben-Zvi explained why the company revised its outlook for the rest of the year. "Looking at the second half of 2023, in the last several weeks we have been witnessing a significantly slower than anticipated pace of bookings and additional customer requests to push out delivery, due to their delayed inventory digestion. As a result, we are reducing our revenue expectations for the second half of 2023.
"In conclusion, the combination of the current financial headwinds with our prioritizing the long-term health of our businesses led us to initiate the plan, requiring a painful workforce reduction and operational expense refinement, to ultimately create a stronger and leaner organization for the benefit of Valens Semiconductor's stakeholders."
