Nextdoor, the San Francisco-based neighborhood social networking platform, is cutting 12% of its workforce, or 67 jobs, to reduce costs and move toward profitability.

The company’s CFO Matt Anderson will step down on September 1.

Annual operating expenses are expected to drop by about US$30 million due to the restructuring.

The layoffs were announced alongside second-quarter earnings, which showed a US$2.2 million adjusted EBITDA loss and a net loss of US$15.4 million.

Revenue rose 3% to US$65.1 million, topping analysts’ estimate of US$60.3 million.

Weekly active users fell to 21.8 million, down from 22.5 million in the previous quarter.

In July, Nextdoor launched a redesigned product with features such as an alert system for critical events, local news partnerships, and an AI-powered chatbot. The impact of these changes has not yet been determined.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Product redesigns often precede workforce restructuring in struggling platforms

Nextdoor’s layoffs come just one month after unveiling a major product redesign in July, suggesting the workforce cuts were planned alongside the platform overhaul.

The redesign introduced emergency alerts, AI recommendations, and partnerships with over 3,500 local news providers—a significant shift from user-generated content that CEO Nirav Tolia referred to as a “refounding” of the platform1.

This timing reflects how companies often restructure their workforce to align with new product strategies, particularly when shifting from growth-focused to profitability-focused operations.

The $30 million in annual cost savings from the layoffs represents nearly half of Nextdoor’s $65.1 million quarterly revenue, indicating the workforce reduction was sized to match the company’s current revenue base rather than future growth projections.

2️⃣ Neighborhood social networks face unique engagement challenges at scale

Nextdoor’s declining weekly active users—from 22.5 million in Q1 to 21.8 million in Q2—highlight persistent engagement issues that have affected the platform for years.