Beauty Health to reduce global workforce by 10%, or 893 employees

In a regulatory filing, Beauty Health said that on November 14, the company committed to the first phase of its cost savings and optimization plan, which is intended to reduce operating costs and streamline the Company’s operations. Phase 1 of the Savings Plan includes a reduction in workforce and non-headcount expenses including but not limited to consulting fees, software expenses, professional services and tradeshow expenses. Under Phase 1 of the Savings Plan, with respect to workforce reductions, the company plans to reduce its current global workforce by 10%, including 95 employees that will be terminated, resulting in a workforce of 893 employees. This includes 63 employees in the United States, representing about 10% of the company’s domestic workforce, and approximately 32 non-U.S. employees, representing about 9% of the company’s international workforce. In connection with this workforce reduction, the company estimates that it will incur charges in the fourth quarter of 2023 of approximately $5.1M related to notice pay, cash severance payments, and other employee-related separation costs. The company expects that the majority of these charges will be incurred in the fourth quarter of 2023 and that the implementation of Phase 1 of the Savings Plan will be substantially complete by March 31, 2024, subject to local law and consultation requirement. After giving effect to the reduction in workforce measures discussed above, and certain other reductions in operations expenses, the company is aiming to have cash and cash equivalents to satisfy its anticipated working capital requirements for its ongoing operations and obligations for at least the next twelve months. The company expects to realize workforce reduction run-rate savings of approximately $17M on an annualized basis starting in the fourth quarter of 2023, and an additional minimum of $3M in non-workforce reduction related Phase 1 savings beginning in the first quarter of 2024. However, the company also expects that a portion of these savings will be offset by year-over-year increases in employee compensation and vendor price increases.