[SAN FRANCISCO] Nextdoor Holdings, the neighbourhood social networking company, is eliminating 12 per cent of its workforce, part of a broader effort by chief executive officer Nirav Tolia to achieve profitability and revamp the business after years of struggles.
Nextdoor, which is cutting 67 jobs, announced the move on Thursday (Aug 7) with its second-quarter earnings report. The layoffs are part of a restructuring plan that will reduce annual operating expenses by roughly US$30 million, the company said. Chief financial officer Matt Anderson is also resigning, effective Sep 1.
The San Francisco-based company reported a US$2.2 million loss in adjusted earnings before interest, taxes, depreciation and amortisation in the quarter, and a net loss of US$15.4 million. Nextdoor said that it expects to break even on an adjusted Ebitda basis in the fourth quarter.
“This is much more about what is the appropriate size for the business given where we are and how can we flip the switch from being a company that is losing money to a company that is profitable,” Tolia said in an interview. He called job cuts “the single hardest thing to do”, but said they were “the right thing for the business.”
Revenue increased 3 per cent to US$65.1 million in the period ended Jun 30, compared with analysts’ average estimate of US$60.3 million, according to data compiled by Bloomberg. Nextdoor now has 21.8 million weekly active users, down from 22.5 million in the first quarter.
Tolia, who co-founded the company in 2008, returned as CEO in 2024, nearly six years after resigning from that same position. Despite raising about US$470 million and attaining a US$2.2 billion valuation as a private company, Nextdoor failed to capitalise on its role as a niche, neighbourhood-focused community network once the company went public in 2021. Its stock has fallen by more than 80 per cent since then.
Nextdoor rolled out a redesigned product in July to focus on more urgent needs, including an alert system for critical events such as power outages. It also partnered with thousands of local news organisations to put their stories into the product, and debuted an AI-powered chatbot so that users can seek local recommendations for things such as restaurants of household services.
That product redesign was not unveiled until last month, so its impact on the business is still unclear, but Tolia said that he’s happy with early results. “We have shifted to a deep focus on utility,” he said. “Our goal is to make Nextdoor something that you rely on every single day and the way to do that is to make it useful.” BLOOMBERG
