Lightspeed to cut labor costs by 10%, but will buy back up to 10% of its stock

By Tomi Kilgore

The POS and payments platform company affirmed its fiscal 2024 revenue outlook

Shares of Lightspeed Commerce Inc. rose Wednesday, after the Canada-based provider of point-of-sale software for retailers and restaurants announced plans to cut labor costs by 10%, as part of the next phase of its growth strategy.

The company also said has launched a program to buy back up to 10% of the public float of its shares, currently valued at about $140 million, which is the maximum amount allowed by the Toronto Stock Exchange.

The U.S.-listed stock (LSPD) (CA:LSPD) rose 1.8% in premarket trading. It has tumbled 33.8% year to date through Tuesday, highlighted by the 24.4% plunge on Feb. 8 as investors expressed concern that the company's plan to reinvest in growth would hurt future profitability.

On Wednesday, the company said the announced "reorganization" was aimed at improving financial performance while also allowing for greater investments in product development and customer experiences.

About 280 jobs will be lost in the reorganization, which represents about 10% of its workforce-related operating expenses. The company had about 3,000 employees, according to FactSet data.

In addition to layoffs, the company said it has also taken other cost-cutting measure in its facilities and operations.

The company didn't provide the expected charges resulting from the layoffs, but said most will be booked in the fiscal first quarter of 2025, which is the current quarter that runs through June 2024, when the reorganization will be substantially completed.

Chief Executive Dax Dasilva said that Lightspeed is "entering a new phase," focused on profitable growth.

"This means making some hard decisions, like reducing spending in specific areas such as headcount, to allow for investments in others," Dasilva said.

Separately, the company affirmed its fiscal 2024 revenue outlook of $895 million to $905 million, which compares with the current FactSet consensus of $904 million.

-Tomi Kilgore

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04-03-24 0805ET

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