Direct-to-consumer footwear brand Allbirds recently announced a workforce reduction and a transition of its co-founder and CEO, Joey Zwillinger, on a call with analysts Tuesday. According to a company filing, 21 employees globally were terminated in May and related expenses are expected to be immaterial. Co-founder Tim Brown has transitioned from CEO to chief innovation officer.

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The copany reported a 13.4% year-over-year decrease in first-quarter net revenue to $54.4 million. Allbirds’ net loss increased from $21.9 million to $35.2 million and gross margin declined from 51.9% to 40.1%. Additionally, the company’s selling, general, and administrative expenses increased 10.3% year over year to $42.8 million. For the second quarter, Allbirds expects net revenue to decline by 12% to 18% year over year.

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The workforce reduction and transition of its co-founder and CEO are part of a larger effort to turn around the business. Zwillinger said in a statement that the company is “executing well against our strategic transformation plan designed to reignite growth, improve capital efficiency and drive profitability.” The plan includes scaling back store openings, reconnecting with core customers, and improving cost savings and capital efficiency.

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The decreased revenue and gross margin were mainly attributable to a decrease in average selling price that was driven by increased promotional activity and a higher mix of third-party sales. The jump in SG&A was attributable to higher stock-based compensation and operational costs from 20 stores opened since Q1 2022.

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Sources: https://www.retaildive.com/news/allbirds-reduces-workforce-co-ceo-transitions-to-new-role/649907/