Q: Your opinion on the January 17th LSPD wpress release: reduce head count and profitability in 4th Q. Clayton
5i Research Answer:
LSPD is removing close to 300 roles (close to 10% of its headcount) after years of rapid growth and increased complexities in the business. Overlapping roles and a top-heavy framework created inefficiencies and the company is seeking to become profitable this year. The company expects to see a one-time restructuring expense of $12M to $14M which will be incurred in Q4. We expect its earnings to be slightly negatively impacted as a result for this upcoming quarter, however, for the remainder of the year these actions should help to marginally improve its net losses. We see this as a move in the right direction, although, the company needs to see other operational efficiencies along with strong revenue growth to become profitable.