News of looming layoffs hasn’t impacted Eventbrite (NYSE:EB) much today. The digital ticketing company recently announced that it will be laying off 8% of its workforce. That isn’t all, though. Eventbrite is also planning some significant restructuring, including shifting some U.S. and Argentina-based roles to Spain and India. This doesn’t sound like good news, but it comes on the heels of Eventbrite’s 2022 Q4 earnings report and shares are rising steadily. Despite a slight dip, they are still up more than 12% for the day, even in the face of the Eventbrite layoffs, and look primed to continue rising.
Let’s dive deeper into what these job cuts mean for the company and what investors should be watching for as more and more companies opt for workforce reductions.
The Eventbrite Layoffs: A Closer Look
EB stock doesn’t make many headlines, but it has enjoyed an excellent year, rising more than 65% year to date. This makes sense, as in-person events have returned, creating an outdoor events boom in the post-Covid-19 economy. In fact, the Eventbrite layoffs are the first major story the company has reported in many months, good or bad.
It’s important to note, though, that while EB is rising steadily today, it likely isn’t due to the layoff and restructuring news. The company reported impressive Q4 earnings yesterday, topping Wall Street expectations and beating expectations on both revenue and earnings per share (EPS). When a company has that type of good news, it’s easy for shares to rise and for investor confidence to do the same.
That said, the Eventbrite layoffs shouldn’t be disregarded, nor should the company’s plans to shift operations to a different side of the globe. Per Reuters:
“As of December 31, 2022, Eventbrite had 881 full-time employees, of which 508 were in the United States and the rest in other locations. The company expects the entire process to be completed by the end of the year.”
Let’s break that down and examine the numbers. An 8% workforce reduction for a company with 881 employees means that roughly 70 Eventbrite workers will be negatively impacted by this decision. That’s not a drastic number, but it’s enough for investors to notice.
However, the fact that news of the job cuts hasn’t pushed EB stock down at all today should signal that the market is fully confident in the company’s ability to continue growing, even as it prepares for operational changes of this scale.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.
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