HubSpot, a Cambridge, Massachusetts-based marketing and sales software company, became the latest tech firm to cut its workforce. It announced Tuesday that 500 jobs, or about 7% of its workforce, would be cut.
'Hardest Decision' in HubSpot's History
Employees were provided about 15 minutes advance notice that layoffs were imminent, according to an email about the cuts to HubSpot staff from Hubspot CEO Yamini Rangan. The CEO, named the head of the company in August of 2021, called the layoffs “the hardest decision we’ve had to make in HubSpot’s history."
The reason behind the move is a familiar one, with Rangan pointing to last year’s “downward turn” following a pocket of prosperity and overzealous hiring throughout the pandemic. Layoffs will be completed by the end of this quarter for the company. Stock in HubSpot was up 1.3% as of Wednesday morning.
HubSpot is expected to announce full-year fiscal results later this month. In Q3 of 2022, it announced revenue of $444 million, up 31% from Q3 of 2021. "We are operating from a position of strength with a solid balance sheet, an incredible team, and a company culture that allows us to attract and retain top talent," Rangan said in a report on the earnings.
However, it was a different tale two months later, when Rangan said this week, “We came into 2022 anticipating growth would slow down from 2021, but we experienced a faster deceleration than we expected. The year was challenging due to a perfect storm of inflation, volatile foreign exchange, tighter customer budgets and longer decision-making cycles.”
Dharmesh Shah, HubSpot co-founder and CTO who started the company with Brian Halligan in 2006, shared his appreciation of affected staff in a Tweet on Tuesday.
🙏 My personal thanks to all of those impacted by the HubSpot layoffs today (about 7% of the team).— dharmesh (@dharmesh) January 31, 2023
Appreciate your contributions.
It has been 16 years since HubSpot was founded, and we are making the necessary changes to (hopefully) have 16 more of Solving For The Customer.
Related Article: SAP Announces Layoffs and Possible Sale of Qualtrics Stake
80,000 Tech Layoffs in 2023
As of Wednesday morning, the former HubSpotters join more than 80,000 other tech employees laid off from 256 companies this year alone, according to Layoffs.fyi.
The last day of January alone saw eight tech companies facing layoffs, including 2,000 cut at PayPal, 960 slashed at NetApp, 525 at Workday, 365 at Upstart, 150 at Wish and OpenText reportedly reducing its workforce by 8%.
In 2023, layoffs have dominated the headlines — with around 18,000 employees at Amazon, 12,000 at Google’s parent company Alphabet, 10,000 at Microsoft, 8,000 at Salesforce, 450 at Informatica, 400 at ShareChat — and about 3,900 cuts at IBM.
At the end of 2022, Meta announced layoffs for 11,000 employees and Twitter, Zillow, Peloton, Cisco and others followed suit. In January 2023 alone, nearly 78,000 more tech jobs were cut — already reaching more than of half 159,684 total tech sector layoffs last year.
HubSpot: 'Headcount Grew Faster Than Revenue'
At HubSpot, Rangan admitted “headcount grew faster than revenue” and cited the immediate need to “reduce investments” unaligned with its current strategy. This includes a “double down” on internal efficiencies and product innovation.
It is unclear which departments at HubSpot were affected by the workforce reductions.
Louisa Proctor, senior global director, learning & talent development at HubSpot, posted on LinkedIn she was one of the affected employees. She began at HubSpot in 2010 as an inbound marketing consultant. HubSpot has long claimed to be the pioneers of the inbound marketing strategy, naming its flagship conference INBOUND. It's attracted more than 20,000 attendees to the yearly show in recent years before COVID-19 moved the show to the digital world in 2020 and 2021.
Margot Mazur, another laid-off HubSpotter, worked in the marketing department. Mazur joined the company in 2018 and served as a senior manager for platform marketing starting in that role last month, according to Mazur's LinkedIn profile.
Well my friends, it happened. Today @HubSpot laid off 5% of us, and I was impacted. I'm looking for a remote-friendly role where I can lead a team of marketers dedicated to driving leads & integration connections through strong partnerships. LinkedIn here: https://t.co/d1oaVRhMPW— Margot Mazur (@hello_margot) January 31, 2023
Rangan discussed in her note about the layoffs the importance of continuing to focus on customers.
“Since day one, our north star has been to 'Solve for the Customer,'” Rangan said. “That hasn’t changed; in fact, our mission is more important than ever. Our customers need us to innovate faster in this environment.”
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