needham analyst scott berg reiterates walkme ltd wkme with a buy and a 20 price target   monday after the market close wkme announced a 10 reduction in force affecting 112 employees to create a leaner more efficient organization that reflects nearterm growth expectations and sets up the path to profitability and longterm growth wkme attributed the job cut to a more challenging macro environment   the job cut marks wkmes second downsizing of 2023 as the company faces significant macro headwinds and has shifted its focus toward profitability and margin expansion   the analyst held his estimates steady yet saw the potential for four to five points of nongaap operating margin upside in fy23 following the impact of the reductions which he believes should enable the company to be roughly breakeven on a nongaap operating income basis exiting fy23   wkme reduced their workforce by 3 at the beginning of 2023 which he believes was almost entirely underperformers within the smb or smaller deal segments of the sales force as the company focuses on upmarket   the additional downsizing highlights the companys intense focus on gaining operating leverage as growth decelerates from 267 in cy22 to bergs estimate of 117 in cy23   the analyst thinks the downsizing provides significant operating margin upside   while he does not believe this incremental reduction will drive the companys operations to a profitable status in fy23 given that he modeled a 10 operating loss he would not be surprised if this change leads to rough breakeven operating margins exiting fy23   he will look for additional color during the upcoming earnings call which will likely be in midmay price action wkme shares traded lower by 269 at 1085 on the last check wednesday now read rivian analyst cuts price target in half on catalyst concerns sees longerterm potential when electrification shifts into overdrive