Global workforce reduction by 8% at Allbirds' corporate level
Allbirds Reduces Global Workforce by 8% Amidst Growth Strategy Shifts
Allbirds, the direct-to-consumer footwear company, has recently laid off 23 employees, representing 8% of its global corporate workforce. The decision was made following a review of roles and processes within each department and market to streamline workflows and reduce duplicative efforts, according to a company spokesperson.
The move follows Allbirds' evaluation to ensure its operating structure is set up for future growth, with a focus on reducing costs and improving efficiency. The company declined to provide specifics regarding severance arrangements but stated that the decision was not made lightly and that it is providing support to affected team members.
Allbirds has been facing increased pressure to meet its "disruption" promise and has witnessed steeper costs cutting into margins, according to William Blair analysts. Despite a improving customer base due to inflation, the brand has struggled with widening net losses and falling gross margins.
The company's recent financial performance reveals a mixed but cautiously optimistic picture as of early 2025. In the first quarter of fiscal 2025, net revenue rose 26% year over year to $62.8 million, although net loss widened by over $8 million to $21.9 million. As a response, Allbirds is focusing on brand marketing and enhancing customer experiences to drive future revenues.
Allbirds has been actively restructuring its retail footprint, with planned store closures and a shift in international distribution strategies that have impacted near-term sales but are part of a broader realignment for efficiency and growth. The company anticipates returning to top-line growth by Q4 2025 and projects approximately 10% net sales growth, excluding structural changes.
The brand is also likely deepening relationships and expanding its presence through wholesale channels and retail partnerships as part of its growth strategy, in addition to engaging in marketing campaigns such as the recent "Cards on the Table" campaign featuring Stanley Tucci.
Allbirds' financials show the company is navigating a period of strategic restructuring with short-term revenue declines but improving profitability metrics and a clear path toward growth in the latter half of 2025. Its expansion strategy includes optimizing retail operations, enhancing brand marketing, and further engagement with wholesale partners to drive future revenues.
- The AI-driven analysis by William Blair analysts suggests that Allbirds might consider utilizing advanced technology and finance strategies to improve efficiency and reduce costs, considering the impact of inflation on their margins.
- With the increase in internet-connected business operations, Allbirds could explore the possibility of implementing remote work arrangements, reducing its office space expenses and potentially maintaining a leaner workforce even after the present layoffs.
- In light of Allbirds' shifting business strategy, there might be opportunities for partnerships and collaborations with other companies in the fields of innovative technology, sustainable materials, and creative marketing—sectors closely tied to both the footwear industry and the burgeoning social trend toward eco-conscious consumerism.
