Bird, the shared micromobility company, has initiated a series of staff layoffs following its recent acquisition of Spin, in an effort to minimize redundancies. This move comes as Bird faces significant challenges in achieving profitability and sustaining its operations. The exact number of employees affected by the layoffs has yet to be confirmed by Bird, but it signals the company’s commitment to streamlining its workforce to better align with its long-term goals.
Key Takeaway
Bird, following its acquisition of Spin, is implementing staff reductions to eliminate redundancies and improve operational efficiency. This strategic move underscores Bird’s commitment to achieving long-term sustainability and financial viability. By focusing on integration and streamlining their workforce, the company aims to leverage the acquisition as a catalyst for renewed success.
The Acquisition of Spin
The acquisition of Spin by Bird took place two weeks ago, with Bird stating that the overlap in geographic operations between the two companies was minimal. Spin, a prominent e-scooter operator, operates in over 50 cities and university campuses across the United States. This purchase was expected to enhance Bird’s market position and offerings, and foster collaborations between the two entities.
However, as with any integration process, there are natural redundancies that need to be addressed in order to optimize efficiency. In an email from interim CEO Michael Washinushi to the company, he expressed the need to reduce the headcount to ensure the organization’s long-term viability and ability to pursue its mission effectively.
Efficiency and Integration
Bird aims to create a highly efficient integrated team by making strategic cuts to its workforce. Impacted individuals received notifications for meetings with senior leaders within their respective departments. These meetings will clarify the next steps and provide an opportunity for teams to discuss the recent events. Additionally, an all-hands town hall meeting will be held to address the staff reductions and provide insights into the integration plans with Spin.
Bird’s Struggle for Profitability
Since its initial public offering via a special purpose acquisition merger in November 2021, Bird has grappled with achieving profitability. Despite a valuation of $2.3 billion at the time of going public, Bird’s stock price experienced a rapid decline soon after its debut. As the company’s financials became public knowledge, investors grew skeptical due to excessive spending without sufficient revenue generation.
Bird’s focus on growth at any cost also contributed to its challenges. The nature of the shared micromobility business, with high costs and low returns, presents inherent difficulties. Moreover, Bird’s transition to an asset-light model, relying on independent contractors for scooter deployment, reduced control over vehicle placement that could impact revenue. The delay in implementing scooters with swappable batteries further increased operational costs and decreased asset utilization.
Attempting to rectify these issues, Bird implemented significant cost-cutting measures in the summer of 2022. The company laid off 23% of its workforce and discontinued its retail scooter product to restore financial stability. Despite these efforts, Bird’s second-quarter earnings in 2023 showed a 19% year-over-year decline in average rides per vehicle per day.
CEO changes and continued financial concerns have plagued Bird. Shane Torchiana assumed the role of CEO in September 2022, succeeding founder Travis VanderZanden. Torchiana implemented aggressive cost-cutting strategies, exiting unprofitable markets and incentivizing fleet managers to rebalance more efficiently. However, these measures did not yield the desired results, leading to continued financial uncertainty.
Can Spin Acquisition Reignite Bird’s Prosperity?
With Bird’s recent acquisition of Spin, there is hope that the consolidation of resources and expertise will instill new life into the company. By streamlining operations and reducing redundancies, Bird aims to create a leaner and more efficient organization. The integration of Spin’s operations into Bird’s existing framework presents an opportunity for enhanced market positioning and service offerings.
