Planet Labs comes down to earth, cutting 17% of staff

Satellite-imaging provider Planet Labs is laying off 17% of its staff, including 98 people based at its San Francisco headquarters.

The layoffs, which amount to 180 people across the company, are part of a broader effort to cut costs at the money-losing business , it said in a Wednesday filing with the U.S. Securities and Exchange Commission.

Planet Labs plans to let go affected San Francisco staff Aug. 26, said Thomas Murphy, its senior vice president for legal affairs, in a letter the same day to state and local officials.

“This action was taken consistent with the Company's ongoing focus on aligning the Company’s resources to the market opportunity, improving operational efficiency, and supporting the long-term growth and profitability of the business,” Planet Labs said in its SEC filing.

Company spokeswoman Claire Bentley Dale declined to comment beyond what Planet Labs stated in that filing.

As part of its recent local cuts, the company is letting go its vice presidents of strategic alliances and strategic accounts, and its directors of corporate development, product and customer growth, software engineering, market development and program management, according to Murphy’s letter. It’s also cutting 12 senior software engineers.

All of the workers affected by the local layoffs are based at its headquarters, which is on the fourth floor of 645 Harrison St., Murphy said.

The company also has offices in Berlin, the Netherlands, Slovenia and Washington, D.C.

This is the second round of layoffs in the last year. Planet Labs announced last summer that it would cut 117 employees globally, or 10% of its staff at the time. The company told the state in August 2023 that the cuts included 85 workers in San Francisco.

Planet Labs operates a constellation of hundreds of satellites that take photographs of and collect data around the planet. It offers its images and data to insurers, farmers and agricultural operations, oil and energy companies and governments.

While demand for its services has been growing, its cuts follow years of losses and the decline of its stock price below $2 a share. In its most recent quarter, Planet Labs lost $29.3 million on $60.4 billion in sales. In its most recent fiscal year, which ended in January, the company lost $140.5 million on $220.7 million in sales.

Since going public in late 2021, the company has never posted a profit. In its last fiscal year, it burned through $50.7 million in cash and spent another $49.9 million on business acquisitions or capital expenditures, including property, equipment and software.

Planet Labs was one of dozens of local businesses that went public in 2020 and 2021 via mergers with special-purpose acquisition companies. Sometimes called blank-check companies, SPACs offer an alternative way for startups to go public than through a traditional initial public offering.

SPACs themselves raise money in IPOs with the explicit purpose of using that cash to attract, merge with and take public already operating business such as startups. By merging with a blank-check company, startups at the time could raise money as they would in IPOs without having to adhere to the same regulations and file the same paperwork required for IPOs.

Immediately after the onset of the COVID-19 pandemic, the Federal Reserve loosened the money supply to spur a recovery from the pandemic-related lockdowns. That move sent a flood of money into the stock markets. During that period, record numbers of SPACs went public and used the cash they raised to merge with startups.

But the market soon soured on SPACs. Many of the businesses that went public in such mergers were relatively immature businesses and unprofitable. When the market fell, most saw their stock prices plunge. Some have since had their stock prices delisted or have gone bankrupt.

Planet Labs’ stock price hit $11.65 a share on its first day of trading in December 2021. It hasn’t closed above $10 a share since. Instead, it has gradually declined. On Thursday, it closed at $1.84 each.

With interest rates spiking, the Federal Reserve started raising interest rates in early 2022. In the wake of those rate increases and a slump in the stock market in late 2022, San Francisco businesses announced thousands of job cuts .

While the number of local layoffs has fallen markedly in recent months, the president of the Fed’s San Francisco branch warned earlier this week that the nation might see an uptick soon as the central bank maintains high rates to get inflation down to its target of 2% .