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Zendesk Cuts 8% of Workforce

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Earlier this week, Zendesk CEO Tom Eggemeier told Zendesk employees that the company would reduce its workforce by 8%. The news comes just six months after the firm laid off approximately 300 workers and hired Eggemeier to right the ship.

Zendesk reported 5,860 employees as of December 2021; taking into account the prior layoffs, the latest round impacts about 445 people.

Zendesk Layoffs

In an open letter to employees, Eggemeier said when he started at the company in November 2022, he'd hoped to avoid further layoffs but, "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."

Eggemeier added that economic pressure and emerging technology like generative AI are shifting business models and strategies, which necessitated a need for the company 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."

Eggemeier added that solutions the company introduced at its Relate event– Zendesk AI and Conversational Commerce – would align with these market shifts and help Zendesk's customers transform the way they do business.

Tech Industry Layoffs

Thousands of workers in the tech industry have been laid off in recent months as higher interest rates, inflation and recession fears have led to a pullback in advertising and consumer spending. In March, Accenture announced in an SEC filing that it would be cutting 19,000 employees globally, or about 2.5% of its workforce, over the next 18 months.

According to the Financial Times, an internal memo from consulting giant KPMG announced last month that it would cut almost 2% of its U.S. workforce as it anticipated waning client demand.

McKinsey could also slash as many as 2,000 non-consulting staff in one of its biggest rounds of layoffs ever, Bloomberg reported last month, citing unnamed sources.

In the MSP space, Atlassian, HP and Zscaler have also slashed headcount in recent months.