Today we announced to our teammates that we’ve made the tough decision to reduce our global workforce by approximately 5%. While this is a business reality for us, these actions are still extraordinarily difficult.
Zendesk has always been a high growth company, and along with the growth of our business we have aggressively increased the size of our team.
We remain confident in Zendesk as a high-growth company and in our ability to continue to build business momentum and drive toward improved profitability. We are confident that Hellman & Friedman and Permira will accelerate us into a new, positive chapter for our business. Realistically, that will take time and requires us to pull back from the ways we have previously invested in hiring growth (which was in advance of business growth). With the very different vantage point today provides, we grew our team much faster than we should have based on revenue growth expectations that were not pragmatic. As an executive team we take responsibility for that.
Over the last two quarters, we have taken a number of measures to try to address the bottom line but found ourselves in the position of needing to do more. In looking at our future business portfolio, we made the difficult decision to eliminate roles. We closed over 100 requisitions. We evaluated any open role for the opportunity to work in a different way.
Unfortunately, we also need to impact current roles. Our decision making on which roles were impacted was informed by five strategic priorities. Our strategic priorities will result in us optimizing our processes and systems, reducing duplication of effort, increasing our spans of control and rebalancing our roles towards Go to Market to build on our enterprise opportunity while continuing to build and deliver compelling products for our customers.
We care deeply about impacted team members and want to support their transition. We’ve hired amazing people, and it’s heartbreaking to have to say goodbye to these colleagues. We know these impacted teammates have big careers ahead. Employees are eligible for the Zendesk severance plan, which includes, at a minimum:
Three months of base salary (plus one week for each full year of service)
A prorated portion of the employee’s annual bonus payable at target
Two months of equity award vesting
Health insurance benefit coverage
Job search support resources
The changes we are making will enable a healthier and more efficient Zendesk. This will create a foundation for us to scale and meet our long-term business objectives – including our customer’s appetite for innovation in our products. We will continue to grow and to focus on growth, albeit at a pace that appropriately balances our need to improve our profitability. We will continue to invest in our big bets that we hope will help us live up to our mission to simplify the complexity of business and make it easy for companies and customers to create connections.
Our company and our culture are a direct reflection of the amazing people, past and present, who have worked here over the last 15 years. That makes a day like today all the more painful. Getting through this will be tough, but it is also our time to recommit ourselves to making Zendesk a great place to work.