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It was an “extremely difficult decision,” says CEO.
November 10, 2022
RingCentral has cut its workforce by 10% despite a strong third-quarter performance, joining a litany of tech companies that have carried out similar measures in recent weeks. As of 2020, RingCentral had more than 3,000 employees.
On its surface, it may be difficult to understand why RingCentral laid off a sizeable portion of its employees. RingCentral garnered $509 million in the third quarter, which was $94 million more than in the same quarter last year. Sales increased by 23% year over year. Even so, the company still had a GAAP operating loss of $183 million, $100 million more than quarter three of last year.
RingCentral’s Vlad Shmunis
Vlad Shmunis is founder, chairman and CEO at RingCentral. He told UC Today that it was an “extremely difficult decision” but that it would allow more agility for the company’s strategic priorities.
Shmunis didn’t specify what those priorities were.
From Microsoft to Twitter to Avaya, tech companies have laid off workers totaling into the thousands. The justifications are varied. Some companies may be letting employees go but soon hiring again in other departments. When Oracle recently laid off 200 people, one analyst told Channel Futures that it was trying to reshape its talent pool. In addition, that company was attempting to hire from lower cost-of-living geographies when possible. Oracle would rather pay for salaries in, say, Idaho or New Hampshire, than in California, or Austin, or other tech-heavy areas.
Keep up with our telecom-IT layoff tracker to see which companies are cutting jobs and the ensuing channel impact.
RingCentral’s stock price rose more than 30% by end of day Thursday, just as it had on Wednesday when the announcement was first made about the layoff. Of course, the stock market brought RingCentral an exceptional two days.
“We’re already struggling with work we need to get done. We can’t lose one more person or things will start to fall apart. There’s only so much of extra work any of us can take on and in my team, we have all reached our limit. If they keep having RIFs, then I hope they give me my walking papers. I don’t want to stay if I’m expected to cover any more work.”
Read more about:Agents
Claudia Adrien is a reporter for Channel Futures where she covers breaking news. Prior to Informa, she wrote about biosecurity and infectious disease for a national publication. She holds a degree in journalism from the University of Florida and resides in Tampa.
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