Pinterest (PINS) Cuts 4% Staff, Announces Restructuring

On March 24, 2023, the Audit and Risk Committee of the Board of Directors (the “Audit Committee”) of Pinterest (NYSE: PINS) approved a restructuring plan intended to support the Company’s corporate strategy, improve efficiency and position the business in light of the ongoing macroeconomic environment (the “Plan”). This consists of a plan to sublease the Company’s leased office space at 505 Brannan Street in San Francisco, which the Company will cease occupying by the end of first quarter of 2023, and abandoning certain other leased office spaces (the “office space reductions”) which are in addition to a workforce reduction of approximately 4% that the Company commenced in February 2023. Decisions regarding the elimination of positions are subject to local law and consultation requirements in certain countries. The Company continues to review its cost structure and operating plan and may determine to take additional actions in the future in connection with the Plan.
The Company estimates that it will incur approximately $100.0 million to $125.0 million in charges in connection with the Plan. These charges consist primarily of $95.0 million to $110.0 million in non-cash impairment and abandonment charges related to the Company’s lease right-of-use assets and leasehold improvements. Approximately $95.0 million to $115.0 million of the aggregate charges in connection with the Plan are expected to be incurred in the first quarter of 2023. Approximately $2.0 million to $4.0 million of the aggregate charges in connection with the Plan are expected to result in future cash expenditures. The Company currently intends to continue to pay all contractual rent payments but plans to sublease all or a portion of our office space at 505 Brannan Street and negotiate early lease terminations, which could materially affect the Company’s cash flows. The actual amount and timing of any resulting impact to cash flows will depend on the outcome of any negotiations with landlords and potential subtenants.
The actions associated with the office space reductions under the Plan are expected to be fully complete in 2023.
The estimates of the charges and expenditures that the Company expects to incur in connection with the Plan, and the timing thereof, are subject to a number of assumptions, including local law requirements in various jurisdictions and negotiations with landlords and potential subtenants, and actual amounts may differ materially from estimates. In addition, the Company may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur, or if it determines to take additional actions in the future in connection with the Plan.

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