Israeli digital ad company Perion Network (Nasdaq: PERI; TASE: PERI) is implementing a streamlining plan, which will involve an estimated 35 layoffs – 6% of the company’s workforce. At the end of 2023, Perion had 561 employees including 235 in Israel and today the company has 650 employees.
Sources close to the company say that most of the employees being laid off are in Israel. As far as is known, Perion is reexamining its organizational structure, mainly in the CodeFuel search division, which has seen its activities scaled down significantly in recent months due to measures taken by Microsoft.
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In recent months Perion has reported two actions taken by Microsoft that has detrimentally impacted its activities. In February Microsoft changed the pricing mechanism for the Bing search engine, which negatively impacted the company’s revenue.
Two weeks ago, Perion announced that Microsoft Bing was excluding a number of publishers from its search distribution marketplace, some of which worked with Perion. The company said that Microsoft’s action would cut revenue by less than 5% in the second half of 2024. Perion underwent a similar situation several years ago when Google changed its pricing policy and the company’s revenue was hit.
Perion, led by CEO Tal Jacobson, has revised its revenue guidance down to $106-108 million inm the second quarter from $118-122 million with adjust EBITDA of $6.5-7.5 million, down from its previous forecast of $10-12 million. Full year 2024 guidance has been cut from $590-610 million to $490-510 million after revenue of more than $700 million in 2023. 2024 EBITDA will be $48-52 million, down 70% from 2023.
The streamlining plan will allow the company to focus on expanding its main growth engines, including programmatic digital out-of-home (DOOH) advertising – a field it entered following the $100 million acquisition of Hivestack – retail media and AI based advertising on smart TVs.
Perion’s share price fell 1.32% on Nasdaq yesterday, giving a market cap of $403 million.
Published by Globes, Israel business news – en.globes.co.il – on June 26, 2024.
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