Sud said the deteriorating economic conditions have forced the company to take this decision and nearly every department and region of the company will see cuts. The majority of layoffs have been in large departments like sales and research and development. Sud said the company’s bookings and revenue trends require ongoing cost discipline to maintain that trajectory going forward.
The video hosting, sharing, and services platform provider joins other companies such as Amazon, Meta, Twitter and Microsoft, among others to have laid off employees due to uncertain economic conditions and/ or over-hiring in the COVID-19 pandemic.
Here’s what Vimeo CEO said in a letter to employees:
Today we made the decision to reduce the size of our team by 11%. Everyone whose job is impacted has received an email and an invite for a meeting with their team leader and HR. For those leaving us: we are so grateful for your contributions and will make every effort to support you. I will be reaching out directly to offer my assistance.
This was a very hard decision that impacts each of us deeply. It is also the right thing to do to enable Vimeo to be a more focused and successful company, operating with the necessary discipline in an uncertain economic environment. It positions us to both invest in our growth priorities and be sustainably profitable while continuing to innovate to bring the power of video to every business in the world.
Why are we doing this again? Why now?
Last summer we committed to making Vimeo a sustainably profitable company. We delivered against that commitment by achieving positive adjusted EBITDA and positive free cash flow in Q3 of 2022— but as we’ve discussed, our bookings and revenue trends require ongoing cost discipline to maintain that trajectory going forward.
Several things have changed since we reduced our workforce by 6% in July. We have seen a further deterioration in economic conditions, in the form of prolonged geopolitical conflict, rising interest rates, and global recession fears. We also have a better understanding of where post-pandemic demand is settling and how that might impact our self-serve growth in the near term. Finally, we have a new executive team in place with a clear plan to focus our investments on 2 business priorities: re-accelerating self-serve, and doubling down on Vimeo Enterprise.
We took action last quarter to streamline our non-headcount costs, from marketing spend to perks to office space. However, our team remains our largest cost as a company. We are entering 2023 with a more focused strategy to simplify Vimeo, and ultimately, our team size and composition needs to reflect that focus. This reduction enables us to achieve our growth and profitability goals in a way that is far less dependent on the broader market, putting us in full control of our destiny.
Who is impacted?
We made reductions in 2 ways: first in structural areas of our product and business where we have decided to significantly reduce focus and investment in 2023, and second by streamlining team sizes across the company to operate more efficiently. As a result, there are reductions in nearly every region and department at Vimeo. The majority of people impacted are in Sales and R&D, as those departments make up the majority of our overall workforce. We will be sharing specifics about which product and business areas are most impacted in a town hall tomorrow.
We care about the people leaving us and will provide them with financial and transition support similar to what we have done in the past, with a few enhancements. While we won’t be openly sharing the names of impacted employees, we are providing transparency on who to contact for critical ongoing work as we transition.
We have demonstrated time and again that we can do hard things as a company. I am proud of our agility and resilience, but I also know that what we need right now is to come together with humanity.
Thank you to those leaving us. I want each of you to know how much we care about your future, and to experience the lasting benefit of this community as you move ahead in your career.
For the rest of our team, we are entering 2023 with more clarity and structural alignment than ever before. I believe in our strategy and in our collective ability to make it happen, as do countless others. The future of work will only become more video-first, and in times of economic constraint, the world needs easy and innovative solutions to communicate and connect better. Let’s focus today on showing up for our colleagues with humanity and care. Tomorrow we will gather at 9 am ET to discuss and reset, so that next week we can go forward.
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