ConnectWise layoffs this week have impacted 4% of its global workforce as a direct result of the COVID-19 pandemic.

Jason Magee, ConnectWise’s CEO, confirmed the layoffs happened on July 7. ConnectWise has well over 2,000 employees and 14 offices globally. It’s based in Tampa, Florida.

ConnectWise’s Jason Magee

“Tuesday was a tough day for everyone at ConnectWise,” Magee said. “These decisions were not made lightly, and the impacted colleagues are receiving severance, benefits and transition services.”

ConnectWise had a 2020 business plan in place, he said. It allowed the company to align and invest for the future, he said.

“Like many others, as a result of COVID-19 and the continued global economic uncertainty, we experienced a disruption in our ability to execute on those plans and needed to make the tough decision to pivot on our approach,” Magee said. “This decision was hard, but purposeful. It allows us to remain healthy and puts us back on track to execute against our plan, so we can continue to invest in strategic areas that will move the company forward: making our products more secure, creating a unified platform, transforming partner experience and helping our partners achieve their vision of success.”

A ‘Healthier Position’

The ConnectWise layoffs were tactically made across the company, he said. And ConnectWise is in a “healthier position” to better invest resources where partners need it most, he said.

“It ensures we can continue to be resilient and flexible to ongoing change and need, better enabling both our partners and ConnectWise to persevere together in our combined future,” Magee said.

Forrester’s Jay McBain

Jay McBain is Forrester’s principal analyst of channel partnerships and alliances. He said in the grand scheme of things, 4% is not an extraordinary number. That’s because of  “the economic climate we are in.”

Forrester forecasts “a 60% probability of a mid-2021 recovery for the channel (Connectwise customers) with more of a U-shape. There is a strong possibility that 25% of their customer base could go bankrupt or forced into M&A without additional government, vendor and distributor credit and capital facilities in the next 12 months,” said McBain.

Last month, ConnectWise released new cybersecurity tools and education at its IT Nation Explore event to help partners position security during the pandemic. Company executives say MSPs need to take a more personal approach during this uncertain and frightening time for customers.