Vimeo Laying Off 11 Percent Of Workforce, Second Major Cut In A Year

A blog posted by the CEO today Anjali Sood informed Vimeo Another 11% of the workforce will be laid off.

Vimeo focuses on the distribution of high-definition video across a range of devices. Vimeo’s business model is software as a service.

The cuts come half a year after Vimeo laid off 6% of its workforce in July 2022. Sood blamed “further deterioration in economic conditions” for the latest round of cuts. He named “prolonged geopolitical conflict, rising interest rates and fears of a global recession” as the culprits behind that slump.

Sales and research and development will be targeted in the latest layoffs. Sood said the majority of the company’s employees are in both departments.

The company is an independent publicly traded entity. Vimeo reported $108.1 million in revenue from 1.6 million subscribers in its third quarter

Sood’s full blog post:

Dear Womens,

Today we made the decision to reduce the size of our team by 11%. People whose jobs have been affected have received an email and have been invited to a meeting with their team leader and HR. To those who left us: We are very grateful for your contribution and will do our best to help you. I’ll reach out straight away to offer my assistance.

It was a very difficult decision that deeply affects each of us. It is also the right thing to do in order to make Vimeo a more focused and successful company that operates with the necessary discipline in an uncertain economic environment. This positions us to both invest in our growth priorities and be sustainably profitable while continuing to innovate to bring the power of video to every business in the world.

Why are we doing it again? Why now?

Last summer we committed to making Vimeo a sustainably profitable company. We delivered against that commitment by achieving positive adjusted EBITDA and positive free cash flow in the third quarter of 2022 — but as we’ve discussed, our bookings and revenue trends require continued cost discipline to drive that trajectory. .

Many things have changed since we reduced our workforce by 6% in July. We have seen further deterioration in economic conditions in the form of prolonged geopolitical conflict, rising interest rates and fears of a global recession. We also have a better understanding of where post-pandemic demand is settling in and how that could impact our self-serve growth in the near future. Finally, we have a new executive team with a clear plan to focus our investments on 2 business priorities: re-accelerating self-service, and doubling down on Vimeo Enterprise.

We took actions last quarter to streamline our non-headcount costs, from marketing expenses to perks to office space. However, our team remains our biggest cost as a company. We are entering 2023 with a more focused strategy to simplify Vimeo, and ultimately, the size and structure of our team needs to reflect that focus. This scarcity enables us to achieve our growth and profitability goals in a manner that is far less dependent on the broad market, giving us complete control of our own destiny.

Who is affected?

We made cuts in 2 ways: first in our product and structural areas of the business where we have decided to significantly reduce focus and investment in 2023, and second by streamlining team sizes across the company to work more efficiently. As a result, Vimeo has cuts in almost every region and department. The majority of those affected are in Sales and R&D, as those departments make up the majority of our overall workforce. We’ll be sharing specifics about which products and business sectors are most affected at the town hall tomorrow.

We care about those who are leaving and will provide them with financial and transition support, similar to what we have done in the past, with some enhancements. While we will not openly share the names of affected employees, we are providing transparency on who to contact for important ongoing work as the transition progresses.

What will happen next?

We have shown time and time again that as a company we can do difficult things. I pride myself on my agility and resilience, but I also know that what we need right now is humanity coming together.

Thank you for leaving us. I want each of you to know how much we care about your future, and to experience the lasting benefits of this community as you move forward in your careers.

For the rest of our team, we are entering 2023 with greater clarity and structural alignment than ever before. I believe in our strategy and our collective ability to deliver, as do countless others. The future of work will only become more video-first, and in times of economic hardship, the world needs easy and innovative solutions to communicate and connect better. Let us focus today on acting with humanity and care for our colleagues. Tomorrow we will gather at 9am ET to discuss and reset so we can move forward to next week.

Honestly,
Anjali