Fall in Nahuel Huapi National Park in Argentina. Planet satellite image captured in May 2023. Photo: Planet

Planet will lay off 117 employees, CEO Will Marshall announced Tuesday, after the company lowered its guidance last quarter. 

Planet published a note that Marshall sent to the company, explaining the layoffs. He said that when the company went public in December 2021, it built up understaffed teams and took on new projects to expand market opportunity.

But now, the company needs to focus on opportunities with the highest return on investment. 

“Our business has scaled rapidly and continues to grow apace, but the expansion of projects has also increased cost and complexity, which slowed us down in some regards. Simultaneously, the macroeconomic environment has changed,” Marshall said. “For both of these reasons, we are making changes to prioritize our attention on the highest ROI opportunities for our business and mission, while reinforcing our path to profitability, consistent with what we shared on our prior earnings call.” 

Planet’s business is growing, and the company posted a 31% year-over-year (YoY) increase in sales in the first quarter of its current fiscal year. The company had 903 subscribers at the end of the quarter, and 90% are in annual or multi-year contracts. Its non-GAAP gross margin has improved as well, standing at 53% for the fiscal year that ended on January 31, compared to 38% from the prior year. 

However, Planet lowered revenue guidance for the full year from $248 million to $268 million in revenue, to $225 million to $235 million, cutting its growth forecast for the year from 35% to 20%. 

Marshall told investors last quarter that sales bookings were coming in lighter than expected, which he attributed to customers experiencing budget uncertainty and longer government procurement cycles. He said Planet would optimize expenses in order to hit its goal of reaching adjusted EBITDA profit no later than the fourth quarter of next year. 

Planet said that departing employees will receive a minimum of 14 weeks of pay. 

“I want to be clear that I am responsible for the decisions that led us here. I know this has significant effects on the lives of our team and their families, and for that I am sorry. We do not make these changes lightly,” Marshall said.