Namely, an HR platform focused on the needs of mid-sized employers, laid off just over 100 employees, or 25 percent of its workforce.
In an interview with the HCM Technology Report, CEO Larry Dunivan said the company had little choice but to cut back as it evaluated the COVID-19 pandemic’s impact on its market. When the company reviewed its forecasts for new business, expansion and churn, “it created a fairly uninspired revenue picture in the near term,” he said. “We made a judgment call to reduce our run rate.”
Most of the affected employees were in sales and marketing, in order to “protect our initiatives in customer support and in engineering,” Dunivan said. “We recognized that while reductions in sales and marketing spend will have to be rebuilt, it was the best way we could get to a place where we could confidently run the business.”
Previously, we reported a TechCrunch article stating that 40 percent of Namely’s workforce had been laid off. The company said that report was incorrect.
According to Dunivan, letting people go was a last resort. “We looked at every possible cost before we looked at headcount in order to lower our overall expense burden,” he said.
Trickle Down Pain in the Mid-Market
Given the amount of pain being inflicted on small and mid-sized companies by the pandemic, challenges to Namely’s business may have been inevitable. A majority of U.S. SMBs, 84 percent, plan to pay less than half of their rent in May, reports to The Wall Street Journal. Some 40 percent won’t pay any rent at all. Moody’s said PPP loans won’t cover the revenue lost by many mid-sized businesses.
Separately, the Journal said that April’s unemployment report, which will be released this Friday, will show a jobless rate of 16.1 percent and the loss of 22 million jobs.
Updated May 15, 2020, to correct number of employees laid off, add statements from CEO Dunivan. We regret the error in our original story.
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