Palo Alto-based SurveyMonkey has joined a growing number of tech startups in the Bay Area and beyond that is trimming their sails, with the cloud-based polling service announcing this week that it’s laying off about 100 staffers from its 750-person crew.
As first reported Monday on the blog site re/code, SurveyMonkey was planning to tell its employees that a need to retool and beef up performance of its enterprise-focused products prompted the change in staffing. The layoffs, which constitute about 13 percent of the company’s workforce, hit its sales team hardest, trimming positions that had been devoted to selling SurveyMonkey’s tools to businesses.
“When you operate a healthy and profitable business, you have to quickly course correct when part of your strategy isn’t living up to expectations,” CEO Zander Lurie said in a statement. “It’s painful to say goodbye to these colleagues, many of whom are friends. We will treat them with respect and provide generous severance packages.”
As news reports have pointed out, the layoffs come amid other fast-moving changes at the firm, which recently hired two new executives to improve its business offerings: Steve Norall was named senior VP for business products, and Brad O’Neill became senior VP for global sales.
The moves and layoffs coincide with the arrival six weeks earlier of former GoPro executive Lurie. In an interview with re/code, Lurie said SurveyMonkey, which is privately held, should rack up $200 million in revenue in 2016 with a profit margin of over 30 percent.
Lurie assumed the top post at SurveyMonkey after former CEO Dave Goldberg, husband of Facebook COO Sheryl Sandberg, died last May. Goldberg, who had been with Yahoo previously, came on board in 2009, helping to expand the operation from a dozen employees to nearly 500. Just days after Goldberg’s death, Lurie was appointed interim executive, leaving GoPro where he served as senior vice president of entertainment for the camera maker.
SurveyMonkey is just the latest in a string of high-profile staffing cuts at well-known brands including AMD, Sprint and Twitter. Last month, Yahoo announced a major overhaul of its workforce, calling the move an “aggressive strategic plan” designed to streamline and refocus its mission after a months-long attempt by CEO Marissa Mayer to turn the company around came up short.
Analyst Ben Bajarin with Creative Strategies said that despite this latest round of tech layoffs and a dip in venture capital funding, he doesn’t see a larger or more troubling trend in play. The problem with companies like SurveyMonkey, he said, is that they’re largely focused on a single product and that may not be enough to thrive in the long run.
“The challenge for companies like Twitter and SurveyMonkey,” he said, “is that they’re simply having trouble growing. And if you’re having back-to-back single-digit growth years, you have to do something to fix that.
“When companies have a single product, they’ll inevitably reach this plateau and hit a growth wall,” said Bajarin. “But there’s still plenty of opportunities for companies out there that have more products to offer.”
Contact Patrick May at 408-920-5689 or follow him at Twitter.com/patmaymerc.
