Around 90 employees of Melbourne-based software firm, Culture Amp, will be leaving the company next week, following in the footsteps of other tech companies such as Atlassian and Mr Yum. The layoffs constitute approximately 9% of the company's workforce of around 1,000 employees.
In a message addressed to his workforce, referred to as "Campers," Founder and CEO Didier Elzinga stated that they had been observing job cuts at various technology firms and contemplating whether they would also encounter similar circumstances due to the expenses associated.
“We are at a point now that I have made the extremely difficult call that we can no longer maintain that position and we are going to have to become a smaller company. We have watched lots of other companies do layoffs, however, we chose to first pull a number of other levers in line with the softening market conditions,” he said.
However, the company has been adversely affected by its clients downsizing their workforce, and Elzinga is of the opinion that the situation will persist to be difficult for a considerable duration. In his words, "Regrettably, as time passes, there is no indication that our customers' situation will improve in the short run."
“Unfortunately as the year has progressed we are not seeing any evidence that the conditions for our customers will improve in the near term. In the context of this difficult macroeconomic environment we need to ensure that Culture Amp can deliver on its mission no matter how long the markets take to improve,” he wrote.
Individuals who are being laid off will complete their employment on April 26th.
“In identifying where we had to remove roles we have focused primarily on how we de-layer, simplify, and restructure the company in order to be able to operate more effectively in this different environment,” Elzinga said in his message.
Employees who are departing will be compensated with a minimum of 10 weeks of pay, which can increase based on their tenure with the company. Additionally, workers based in the US will be provided with four months of medical insurance, as well as mental health assistance and outplacement services.
According to Startup Daily, almost two years have passed since Culture Amp's valuation reached $2 billion, which was achieved through a Series F funding round that raised $135 million. This amount was twice the value of the company's 2019 Series E round, which had a valuation of $121 million.
Founded in 2009, the company has received financial support from a variety of sources, including TDM Growth Partners, Sequoia Capital China, Salesforce Ventures, Skip and Grok Capital, and the venture capital funds operated by Atlassian co-founders Mike Cannon-Brookes and Scott Farquhar.
Almost three years have passed since Culture Amp reduced its workforce by 8% during the height of the COVID-19 crisis. This translated to the loss of 36 jobs, which serves as a testament to the significant expansion the company has undergone since then.