JUNE 4, 2023 — ANOTHER 8%
Look for Zendesk to be heavily impacted by automation and AI technology as customers employ their own chatbots and ticket-tracking systems.
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.
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.
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.
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.
NOVEMBER 7, 2022 — 5% OF THE WORKFORCE
The company has announced laying off approximately 5% of its overall workforce, impacting an estimated 350 Employees.
JUNE 27, 2022 — ZENDESK TO GO PRIVATE
Prior to posting, we learned that Zendesk was being taken private in a $10.2 billion deal with by leading global investment firms Permira and Hellman & Friedman LLC.
San Francisco, California-based Zendesk, a provider of help desk management platform offered as a Software-as-a-Service, has announced an ongoing review of its strategic options and continued pressure from an activist investor, New York, New York-based Jana Partners, to sell the company.
The company walked away from its offer to acquire Momentive, the owners of SurveyMonkey for $4.1 billion after its shareholders rejected the deal. The company also rejected a $17 billion takeover offer by private equity firms.
According to a letter from Jana Partners...
Zendesk’s lengthy effort to win support for the Momentive acquisition has been met by vociferous and sustained rebuke. JANA Partners, other shareholders and sell-side analysts have criticized and opposed the acquisition. Last Friday we were joined by leading independent proxy advisory firms ISS and Glass Lewis, both of which advised Zendesk shareholders to vote AGAINST the transaction. With the February 25th vote fast approaching, we believe Zendesk shareholders will finally be able to save themselves from their own board by voting down the Momentive transaction.
However, lasting damage has been done. We believe the board has all but assured that Zendesk will suffer a persistent discount to its intrinsic value. The board has shown a reckless disregard for shareholder capital, a seeming readiness to resort to “questionable reasoning” when challenged, and most recently reinforced concerns about its history of refusing to engage with interested strategic and financial buyers for the Company. With the current board at the helm, we believe shareholders are perpetually in danger of what Glass Lewis characterized as the board’s “ready, fire, aim” process.
To address the damage Zendesk’s board has already inflicted on shareholders and to protect against further harm, we believe the board must either be replaced with capable fiduciaries or reverse course and engage with interested strategic and financial buyers to sell the Company."
The handwriting is on the wall at Zendesk and employees are cautioned to stay vigilant.
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?
