Five9 will reduce its workforce by seven percent, which equates to approximately 180 employees.
The company revealed the news in an SEC filing, claiming that the move is part of a larger plan to increase shareholder value.
Indeed, the filing states that the staff reductions are “part of the Company’s broader efforts to drive balanced, profitable growth, further supporting our positive, long-term outlook and focus on increasing shareholder value.”
It also suggests that Five9 will “substantially complete” actions from within the plan, including making those job cuts, by the end of 2024.
Already, the company has kickstarted that process, notifying all impacted employees yesterday (August 20, 2024).
Before sending out those notifications, Five9 CEO Mike Burkland shared an email to all employees.
In the email, Burkland noted that his and the company’s immediate priority is to support the affected staff members through this transition.
That support includes severance and job transition assistance.
Burkland continued: “Looking forward, Five9 is focused on driving shareholder value by increasing revenue, improving profitability, investing in our key strategic initiatives, and delivering for our customers.
I have enormous confidence in Five9 and each of you as we continue to align and execute as one team.
That confidence comes as Five9 revenues continue to grow at a double-digit rate, which is seemingly impressive in the crowded CCaaS market.
Last quarter, it also became just the third vendor to publicly announce that it surpassed the $1BN in annual CCaaS revenue milestone – after Genesys and NICE.
Moreover, just two weeks ago, the company agreed on a deal to acquire Acqueon to enhance its journey orchestration capabilities.
Each of these indicators would suggest that Five9 is ticking along nicely.
However, it has had to deal with activist investors in recent months. Meanwhile, Five9’s stock price plunged 25 percent two weeks ago as it lowered its annual revenue guidance.
As such, the need to do more to please investors may have proved too strong to avoid these cuts.
Nevertheless, Five9 is far from the only vendor in the CCaaS space to make this unfortunate move, with the likes of Avaya and Cisco also announcing layoffs in recent months.
More Layoffs from Across the CCaaS Space
Five9’s layoffs come just a week after Cisco announced a seven percent reduction in its workforce, with Webex seemingly set to be a victim of the cuts.
Indeed, Cisco’s collaborations business will merge with networking and security to form a single unit as the enterprise tech giant prioritizes its growth opportunities.
With its security business growing much faster than Webex and its networking business, expect that to become the primary focus within Cisco’s newfound unit.
Meanwhile, Avaya announced layoffs in July, with – just like Five9 – approximately 180 employees leaving the contact center provider. That equates to three percent of its team.
Over the past two years, layoffs have hit more of Five9’s CCaaS competitors, including Talkdesk, Twilio, and LiveVox (following its acquisition by NICE).
Some have speculated that these industry-wide layoffs result from increased competition and slower growth in the CCaaS space.
However, it’s just as likely that the sudden impact of generative AI (GenAI) and the broader AI trend is causing vendors to restructure their businesses to better deliver on new customer requirements.
A Statement from Five9
Since the initial publication of this article, a Five9 spokesperson has reached out to CX Today and shared the following statement:
“As Five9 continues its focus on profitable growth and business resilience, we have made the difficult but necessary decision to reduce our global workforce by approximately 7%.
“We extend our gratitude to all impacted employees for their contributions and dedication during their time at Five9.
“We are proactively working to support those affected during this transition and remain focused on delivering for our customers.”
