Redbubble Group, which operates marketplaces for artists – Redbubble and TeePublic, has laid off 141 staff members, or 37 per cent of its workforce, in FY23 as part of cost-saving measures.

The group faced challenging trading conditions, particularly in the US, and decreasing demand during the year, Anne Ward, chair of the board, said at the annual meeting last week.

“The group’s cost base was out of step with its revenue and it became apparent that we needed to curtail our level of investment to return to profitability,” said Ward.

To respond, the board focused on a set of initiatives in the second half and managed to reduce operating expenditure by $45 million on an annualised basis. 

“The group delivered positive underlying cash flow in the first quarter and is on track to deliver positive underlying cash flow for FY24,” Ward added.

The cost-cutting initiatives fall into three categories – cost of doing business, brand and people, explained Martin Hosking, Group CEO and MD.

“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.”

The group also suspended its brand awareness project as it no longer delivered a commensurate financial return, Hosking continued.

“Finally, we had to make a number of difficult decisions related to our employees. This was a considered process to ensure that we maintained the capability to deliver our priorities and position the group for growth,” he stated.

According to Ward, the group plans to change its name to Articore Group as it restructures to more clearly define the parent entity and the two operating businesses, Redbubble and TeePublic.

This will enable each marketplace to focus on its strengths and unique value propositions and allow the group to monitor the financial performance of each marketplace more transparently.

“The differences between the two businesses enable artists to reach different customer segments, while their similarities facilitate learnings and provide opportunities for economies of scale.” she elaborated.

The restructuring is the first step to a “potential expansion”, as the group considers adding new operating companies that leverage and add to its assets and capabilities, added Hosking.