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Zendesk Workforce Reduction

Published 31 May 2023

Earlier today, Zendesk CEO Tom Eggemeier sent the following note to Zendesk employees.

All, this is difficult news to share, but I’ve made the decision to reduce our workforce by 8% at Zendesk. I’ll share more on why in a moment but first, I want to ensure everyone understands what happens now and what those impacted can expect from Zendesk.

For those impacted, within the next hour you’ll receive an email from People and Places at both your Zendesk and/or personal email addresses. This will include information about your severance package as well as how to arrange an optional 1-1 conversation with a Zendesk leader on your team. In some countries, this process, including notifications about potential role impact, will take longer due to local requirements and practices. These were very hard decisions that I am truly sorry we had to make. You’re talented and passionate and we appreciate everything you’ve done for Zendesk. We’re going to do our best to make sure you’re taken care of during this time.

For those not impacted, we know this is a difficult time for you too, as we all say goodbye to teammates. In the coming days, your E-staff and team leaders will hold meetings to talk more about what this means for your organization and team. Today and tomorrow, we’ll have two Leadership Q&As.

I know Slack/email is not the ideal way to learn about this, particularly if you’re receiving this during non-working hours. But we also know any delay in understanding whether or not you’ve been impacted would be unsettling. We wanted to ensure everyone had the information at the same time and also offer impacted individuals a way to connect directly with leaders to ask questions.

How we’re assisting impacted employees
Each impacted employee will be eligible for the Zendesk severance plan, which includes:

  • Three months of base salary/on-target earnings (OTE for sales commission employees) (plus one week for each full year of service)

  • Career coaching, resume review and job search resources

  • A prorated portion of your annual bonus payable at target

  • 60 days of vesting cash (for those who still had RSUs that were converted to vesting cash upon the acquisition of Zendesk)

  • Health insurance benefit coverage through the form of continued coverage or lump sum (varies by country), including access to Modern Health for employee counseling

  • 1:1 immigration support through our global mobility team for those on work visas

Individual severance packages will also be determined by taking into account a variety of factors such as local statutory requirements and individual tenure.

Why I made this decision
From 2020 – 2022, our hiring outpaced our business realities. When I joined at the end of November, I’d hoped a combination of improving macroeconomic conditions and streamlining costs would help us avoid this moment. Unfortunately, macroeconomic conditions have not improved and we find ourselves in an increasingly competitive marketplace.

At the same time, our customers are navigating massive shifts in how they do business, including increased pressure to deliver profitable growth and leveraging fast-advancing technology like generative AI. To best serve our customers, we have to sharpen our focus and wherever possible, direct our talent and resources to our highest priorities including maturing how we go to market and building new products and capabilities that deliver tremendous value.

This necessitates taking a thoughtful look at our teams and how we best balance the needs of all of our stakeholders.

How we move forward
I took on the role as CEO because I’ve admired Zendesk for many, many years. We have great products, but now having worked here at Zendesk, I know how great our people are too.

For those impacted, I want to say again how sorry I am and reiterate how grateful we are for everything you have given Zendesk. The fact that these changes will impact your lives weighs very heavily on me and, as CEO, I take full responsibility for this decision.

For those not impacted, I know change of this nature is challenging. Not only are you thinking about your impacted colleagues, but you may also be concerned you’re now going to be asked to do more with less. The leadership team and I are committed to helping every team achieve our objectives in a way that’s focused on our priorities. In the Leadership Q&As, we’ll also discuss how we’re investing in our innovation and people.

Looking ahead, I believe we have an incredible opportunity to lead the new era of intelligent CX. The new solutions we introduced at Relate – Zendesk AI and Conversational Commerce – will help our customers transform the way they do business.

To close, I ask that you continue to help us do right by Zendesk customers, partners, and your current and departing teammates by being conscientious, collaborative and solution-oriented. Please take care of yourselves today as you absorb this difficult news. Take time as you need it. And as always, reach out to your managers, E-staff leaders, People Partners and me directly.