Sonder, the short-term rental and hotel company, announced a series of moves to cut expenses and increase cash as it anticipates the integration of its properties with Marriott digital channels by the end of June.

Sonder said it plans on making $50 million in annualized cost reductions from headcount cuts, “software savings and other efficiencies in conjunction with the Marriott integration.”

Sonder’s announcement did not detail the number of expected layoffs.

To raise cash, Sonder said it sold $18 million in Series A preferred shares and that it received $7.5 million key money on Friday from Marriott as part of the 20-year licensing deal announced in August. Sonder listings on Marriott.com will by marketed as Sonder by Marriott.

Sonder it said it amended its note and warrant purchase agreement, trimming the interest rate by 50% and reducing the outstanding principal balance by 15%.

Sonder Needed the Cash Infusion

Sonder co-founder and CEO Francis Davidson said the moves “bring us closer to completing our transformation.”

He added that the Marriott integration would “enhance positive RevPar,” and that the Sonder portfolio has already been seeing “profitability trends.”

In its latest financial report, for the quarter ending September 30, 2024, Sonder notched $179 million in losses.

Sonder’s free cash flow was negative $17.3 million at the end of the third quarter of 2024.

It hasn’t reported fourth-quarter results, and on March 31 said it would be unable to file its annual 10-K report with the Securities and Exchange Commission in a timely manner. It plans to do so as soon as possible, the company said, but in the meantime expects to be notified that it is no longer in compliance with Nasdaq listing rules.

Sonder had to restate earnings for 2022 and 2023 because of errors concerning the valuation and impairment of operating leases, it said.

The company announced last month that it was issuing restricted stock units as inducements to two newly hired employees, and stock options to 463 employees hired from mid-November 2023 to late February 2025.