Why Sonder Faces a Long Road Back — And Vacasa May Be Next

The once-hyped short-term rental startup Sonder faces a long road back after a painful restructuring it announced this week in a bid to save its fast-dwindling cash pile. And even if the San Francisco startup succeeds, its image and its stock will likely never be the same.

That's the takeaway from a key analyst and a leading rival, after Sonder said it would lay off 21 percent of executives, 7 percent of other staffers, and cut back on adding new apartments and hotels spaces to rent. With its shares now down 83 percent from their peak after Sonder went public this winter, investors have clearly soured on the idea that Sonder's addition of apps and analytics to make rentals easier to manage and market didn't change the fundamental economics of what is, after all, a real estate business rather than the technology company it has positioned itself as.

"As the stock market fled to value and cash flow, it ran against companies that lose tens of millions of dollars a month," said Steve Milo said, founder and CEO of vacation-rental rival Vtrips. "Sonder was WeWork Jr."

WeWork, of course, was the unprofitable New York-ba