MSP, Mergers and Acquisitions, Content, Private equity

Kaseya Denies Cutting Some Datto Employee Benefits

An internal Kaseya email to employees denies that it cut some Datto employee benefits. Allegations of benefit cuts surfaced in a blog from former Datto CEO Austin McChord.

The alleged benefit reductions surface less than one month after Kaseya completed the $6.2 billion Datto acquisition to become the MSP industry's largest technology provider.

Datto Employee Benefits: The Statements

Among the alleged Datto benefit changes described by McChord: Reducing maternity leave to three weeks (down from 16); eliminating 401K matching (down from 4.5%); and reducing vacation/paid time off to 17 total days (down from a 20+10 policy). In a blog, McCord -- who is no longer associated with Datto -- alleged that the changes will "hurt the entire MSP industry."

Kaseya denies that it made the cuts. An email to staff from Kaseya CFO Kathy Wagner stated, among other things:

  • "There are zero changes to the benefits of all Datto. Period;
  • there is no reduction in 401K match, no change/reduction in maternity/paternity leave benefits, nor changes/reductions in PTO for any Datto employees."

Those policies were "very clearly stated by Fred at both the Boston and Norwalk town halls, the FAQs that were sent when the deal officially closed and is being reiterated again here in this email," the email indicated.

Kaseya acquired Datto for $6.2 billion from private equity firm Vista Equity Partners and public shareholders ($MSP) in June 2022. Kaseya essentially bid against itself in the last round of offers for Datto. Meanwhile, rival ConnectWise (represented by Thoma Bravo) expressed reduced interest in the potential acquisition amid concerns about Datto's dependence on hardware-based storage appliances, sources have suggested to ChannelE2E.

When the deal closed in June 2022, Kaseya CEO Fred Voccola vowed to reduce Datto list prices and to drive innovation, and Datto Senior VP Rob Rae said the deal was "absolutely the best thing" that could have happened to Datto employees and MSP partners.

Ahead of the M&A deal, Voccola alleged that rival M&A deals -- such as the ConnectWise-Continuum deal of 2019 -- largely involved cost cuts and offshoring employees. In contrast, Voccola said Kaseya continues to invest for growth.

Meanwhile, headcount figures at Kaseya and Datto have grown since the M&A deal was announced in April 2022.

  • Datto now has 2,101 employees listed on LinkedIn, up from 2,053 in April.
  • Kaseya now has 1,929 employees listed on LinkedIn, up from 1,752 in April.

Looking ahead, Kaseya, Datto and the MSP community are preparing for DattoCon22 -- which is scheduled for September 11-13 in Washington, D.C.

This story has been updated to contain Kaseya's statement, which was shared internally with employees.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.