Zendesk plans to lay off roughly 300 employees -- or about 4.9% of staff at the cloud-based customer support and IT service management (ITSM) software provider, an SEC filing revealed.
Among the key factoids from the filing:
- Zendesk's board of directors approved the layoff plan on November 3, 2022.
- This decision was "based on cost-reduction initiatives intended to reduce operating expenses and sharpen Zendesk’s focus on key growth priorities."
- The job cuts will cost Zendesk about $28 million in "connection with the reduction in force, primarily consisting of severance payments, employee benefits and related costs.
- Most of the cuts should be completed by the first quarter of 2023, though some cuts may take a bit longer based on local laws.
Related: See all technology industry layoffs listed here.
Zendesk Company Sale, Business Challenges
The Zendesk layoffs emerge among the company's pending $10.2 billion sale to two private equity firms -- namely, Hellman & Friedman and Permira.
The sale price is far below the $15.25 billion valuation that Zendesk had in April 2022. Hence, Light Street Capital has objected to the pending deal.
Although Zendesk is growing, the cloud software provider faces concerns from shareholder activists who believe the company has been mismanaged.
Zendesk Company Timeline
Among the Zendesk developments and factoids to keep in mind:
- June 24, 2022: Zendesk confirmed the company’s sale less than one month after saying there were no plans to sell the business.
- June 9, 2022: The Zendesk board “unanimously determined that continuing to execute on the Company’s strategic plan as an independent, public company is in the best interest of the Company and its stockholders at this time.”
- May 12, 2022: Private equity firms Permira, Hellman & Friedman, and Advent International each are exploring a potential Zendesk acquisition, DealReported indicated. Zendesk’s current market cap is now $12.34 billion.
- April 19, 2022: Zendesk’s market cap ($ZEN) is $15.25 billion.
- April 18, 2022: The company hired Qatalyst Partners to pursue potential buyers for the business, Bloomberg reported — though there’s no guarantee that an actual company sale will occur.
- February 25, 2022: Zendesk abandoned a planned buyout of SurveyMonkey parent Momentive in February 2022. Critics considered the $4.2 billion deal too expensive and a poor fit for Zendesk’s business.
- February 16, 2022: Jana Partners said it wants Zendesk to overhaul its board or sell itself.
- February 10, 2022: Zendesk rejected a $16 billion buyout offer from private equity firms.
