Aterian announces fixed cost reduction plan amid SKU rationalization program

Aterian announced a fixed cost reduction as part of the final steps of its previously announced SKU rationalization program. The Company also released certain preliminary fourth quarter 2023 results. Fixed Cost Reduction Plan The fixed cost reduction plan is expected to align the Company’s costs to what the Company believes will be the appropriate level as it drives towards adjusted EBITDA profitability in the second half of 2024. The Company expects to reduce its workforce by 21 employees and 27 contractors, primarily in the Philippines and Poland, and to recognize annualized savings of approximately $4M. The Company expects to primarily complete the plan by the end of the first quarter 2024 and to recognize and pay restructuring charges, primarily related to severance, of 900,000K in such quarter. “Today’s announcement reflects a continuation of earlier initiatives to focus, simplify and stabilize our core business and to reposition Aterian for profitability and growth. Arty and I are proud of our team’s efforts, and we expect further progress in the quarters to come. To our impacted colleagues, the decisions made were difficult, and Arty and I are deeply grateful for your contributions to Aterian. We wish each of you all the best,” said Joe Risico, Aterian’s Co-CEO. As part of this plan, the Company has shifted the architecture of its technology platform, AIMEE, away from a fully internally developed model to an integrated third-party, best-of-breed model. This shift is expected to account for approximately $0.7 million of the expected annualized savings announced today. “This shift to a best-of-breed integrated third-party approach, is not only expected to lead to cost-savings but is also expected to increase our speed and agility to support our push to an omnichannel strategy and address our continually changing marketplace environment,” said Arturo Rodriguez, Aterian’s Co-CEO and CFO; and he added “our technology will continue to be lead by our CTO, Roi Zahut, and we continue to believe being tech-enabled is the key to our future. Together, these changes have increased our optimism regarding our path to adjusted EBITDA profitability in the second half of 2024.”