BigCommerce became the latest ecommerce platform to announce layoffs on Thursday.
The open SaaS ecommerce platform said it will reduce its workforce by 13% across employees and contractors by the end of the calendar year as part of a restructuring plan that is designed to speed up the path to profitability. As of Dec. 31, 2021, BigCommerce had 1,337 employees, according to an SEC filing reported by Marketwatch.
On its recent earnings call, company executives signaled that they will shift sales and marketing dollars to enterprise sales, where it said it sees “the strongest unit economics and the opportunity for long-term, profitable growth.” On Thursday, the company said the reduction of non-enterprise marketing expenses is part of the restructuring plan.
“This focusing of our spending and resources, which impacts all of our teammates, was an incredibly difficult decision to make,” said CEO Brent Bellm, in a statement. “We are implementing changes that will enhance the strength of our financial profile against the backdrop of a challenging economic environment. It will also drive focus on the areas we view as having the strongest product market advantage and best long-term financial performance,” said Brent Bellm, CEO of BigCommerce. “We are sadly parting ways with some incredibly talented people whom we have grown to cherish as friends and colleagues over the years. We will do our best to support them through the transition to find their next opportunities.”
The company said the cost associated with the layoffs will range from $4.2 million to $4.6 million.
BigCommerce cast the move as necessary to achieve profitability quicker, which follows a pattern of prioritizing sustainability over growth heading into 2023. The company said the restructuring shifts its adjusted EBITDA breakeven timeline from mid to late 2024 to the fourth quarter of 2023. It also reiterated guidance for the fourth quarter and full year.
BigCommerce follows Amazon, Shopify and Meta among the platforms that provide the infrastructure for ecommerce to make layoffs this year. In their announcements, those other companies said they had over-hired during a pandemic ecommerce boom that did not see growth pull forward as expected.
For its part, BigCommerce said the enterprise focus and profitability were the main forces behind the reduction.
The move toward running ecommerce for more established brands and retailers can require longer sales cycles and could mean choppier growth month-to-month, but it also holds out the potential of more sustained revenue, with frequent opportunities to add features. In Q3, BigCommerce said its enterprise accounts were up 16% year-over-year, while annual recurring revenue (ARR) for this segment was up 35% year-over-year. Clients who launched new stores using BigCommerce in the quarter included One Kings Lane, Hungry Harvest, Music Direct and Dippin’ Dots.
“We are actively shifting our demand generation budgets, both in people costs and variable spending towards the superior economics delivered by enterprise accounts,” Bellm told analysts on the recent earnings call. “We have tested this increased spending prioritization over the past two quarters, and we are moving full speed on this now across all teams and budgets.”
Coming out of the swings of the last two years, Shopify has also voiced a priority on signing more enterprise clients. With a more difficult environment for startup brands as a result of the tightening economy and more difficult performance marketing following Apple's privacy changes, don't be surprised to see more ecommerce SaaS companies focus on bigger stores in 2023.
