Five9, a San Ramon-based contact center products vendor, has recently announced workforce reduction. The company has decided to lay off approximately 7 percent of its workforce.
This move comes as part of the company’s broader efforts to drive balanced, profitable growth and increase shareholder value.
The Layoff Announcement by Five9
In an email to employees, Five9 CEO Mike Burkland expressed the difficulty of the decision. While also acknowledging the painful goodbyes that some team members would face.
The layoffs will affect fewer than 200 people, considering the company’s total full-time employee count of 2,684 as of December 31.
The San Ramon tech firm plans to allocate approximately $12 million to $15 million for notice period payments, severance, employee benefits, and related costs. Most of these payments will occur during the third and fourth quarters of this year.
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Mike said, “Sadly, we have made the very difficult decision to say painful goodbyes to some of our team members.”
“As you know, we recently announced in our earnings call that we reduced our revenue guidance for 2024 and will focus on improving profitability through managing expenses,” he said in the email.
He continued, “Looking forward, Five9 is focused on driving shareholder value by increasing revenue, improving profitability, investing in our key strategic initiatives, and delivering for our customers.”
I have enormous confidence in Five9 and each of you as we continue to align and execute as one team,” Sam said.
Industry Trends in Workforce Layoffs
Post-Pandemic Hiring Spree Fallout: The pandemic-induced surge in technology adoption led to a hiring spree in certain sectors. However, as the dust settles, companies are reassessing their workforce needs, resulting in layoffs to optimize costs.
The Cost-Cutting Dilemma: Overspending in 2023 has created challenges for businesses in 2024. To maintain profitability, companies are scrutinizing expenses, which often translates to workforce reductions.
Artificial Intelligence (AI) Takeover: As AI technologies advance, some roles become redundant. Companies are automating tasks, leading to layoffs in areas where AI can perform more efficiently.
Mergers and Buyouts Impacting Jobs: Mergers and acquisitions often result in workforce restructuring. Companies seek synergies by eliminating duplicate roles, which can lead to layoffs.
Rise in Outsourcing: Organizations are increasingly outsourcing non-core functions to specialized service providers. While this can improve efficiency, it also means downsizing internal teams.
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