Australian-born global marketplace Redbubble has cut 141 people from its workforce in FY23.
This is a reduction of 37% of Redbubble's workforce globally, coming amid a raft of other cost-cutting measures in the second half of the year.
Redbubble sells print-on-demand products based on user-submitted artwork.
According to CEO and MD Martin Hosking, the company is expected to save around $45 million in operating expenditure in FY24, with guidance pitted to be between $92 million and $100 million.
“The savings identified fall into three categories - cost of doing business, brand and people," Hosking said.
“To lower the cost of doing business, the senior team reviewed all contracts in place. This led to significant cost savings across the business with substantive reductions in the cost of website hosting and software.
“In January, the group announced that the brand awareness project would be suspended as the group no longer expected it to deliver a commensurate financial return.
“Finally, we had to make a number of difficult decisions related to our employees. This was a considered process to ensure that we maintained capability to deliver our priorities and position the group for growth.”
Amongst the cost-cutting, Redbubble has also implemented select technology and software to reduce friction in operations.
This includes the launch of a dynamic order-routing system in the US, where each delivery is automatically reviewed to curate the lowest cost fulfilment and fastest shipping option.
“The system also provides greater transparency to fulfillers about how orders are routed based on their speed, product quality, and cost,” Hosking said. “This has led to fulfillers reducing their pricing to increase the amount of volume that our platform software routes to their sites.”
The company has also rolled out artist account categories across both its marketplaces, Redbubble and TeePublic, to improve product, as well as added more friction to Redbubble’s artist sign-up process to prevent the uploading of low-quality content.
These measures are expected to drive its gross profit after paid acquisition (GPAPA) margin in FY24, with guidance expected between 23% and 26%.
“We have made significant progress to strengthen the foundations of the group’s two operating companies,” Hosking said. “We are now moving into phase 2 and shifting our focus to delivering sustainable profitable revenue growth in our existing operating companies.”
“We are confident that we can do this with the team in place and current level of resources.”
Redbubble is also considering adding new operating companies that leverage and add to its assets and capabilities - including its global fulfilment network, its artist base and technology and marketing expertise.
Hosking said this could be both through organic and inorganic opportunities, and added that restructuring the group was the first step to facilitate this potential expansion.
“An example of a new vertical is a marketplace focused on a new product category that leverages the group’s content library,” Hosking said. “In hindsight, the pets category [on the Redbubble marketplace] may have performed better if it was a separate marketplace, as the customers who shop on the Redbubble marketplace are not necessarily those who are looking for pet products.
“Once we have proven this concept, there are a number of opportunities that we can explore.
“We see ourselves as the owner of companies that contribute to the global creative ecosystem and are focused on this space.”