Opower CEO Dan Yates told investors last March that he plans to make his utility software company profitable in 2017.

After many years of expansion and experimentation, Yates now wants to focus on refining Opower's demand-side management offerings and growing its customer care business that was launched in early 2015.

The company's first major action: end its floundering thermostat business.

“We realized that the thermostat has become entirely a consumer business and that's not our bread and butter," said Yates on an investor call last year.

A second piece of the plan is now underway. And this one includes a modest round of job cuts. 

Opower is cutting 25 positions in its Virginia and San Francisco offices, and 20 positions in overseas offices. The layoffs amount to 7.5 percent of the company's workforce. ARLnow.com first reported the news yesterday.

GTM confirmed the cuts with Opower's VP of Communications Matt Maurer. "The two organizations that are mostly affected are R&D and overall sales and marketing," he said.

Maurer wouldn't comment on specific positions or teams within the groups affected by the cuts. He did say that Opower is looking to scale back incremental investment in R&D, which has amounted to more than $100 million over the years. 

"This isn't unusual for post-IPO companies," said Maurer. "We're looking to get a better expense profile."

It's also not unusual in Opower's line of business. Selling software to slow-moving utilities is hard and many companies have struggled to gain traction. So while Opower has the soul of a startup, its personality must adapt to match the conservative nature of its customers. That means scaling back spending on new products and focusing instead on the offerings that are bringing in strong business.

"This is really an effort to bring expenses more in line with growth," said Maurer. "As our strategy has crystallized around demand-side management and customer care, we thought we could be more focused in both areas."

Opower brought in $148.7 million in revenue in 2015, a 16-percent increase over 2014. The company's GAAP net loss increased from $41.8 million in 2014 to $44.9 million in 2015. 

The company now has $480 million in contracted revenue, buoyed by a handful of large utility contracts signed last year. Customer care products (call center software, billing management software and digital engagement) were included in Opower's three largest contracts in 2015 with PGE, National Grid and Exelon.

"We're approaching profitability. We're stronger than ever. We just needed to have a better balance," said Maurer.

Opower's share price has fallen by more than 30 percent this year. However, the consensus among analysts is that the stock is still worth buying.

Can a company like Opower convince utilities to move faster? Listen to the Energy Gang debate the issue with Dan Yates: