Utah-born tech giant Qualtrics announced Wednesday it is cutting some 780 jobs from its workforce of around 5,000 as the company gets set to move forward with a restructuring effort under new private ownership.
In addition to the layoffs, the company plans to redefine and shuffle hundreds of other positions, according to an email from Qualtrics CEO Zig Serafin that went out to employees Wednesday morning.
In the post, Serafin wrote the decision to reduce staff was “painful” but “also necessary” and noted an earlier period of rapid hiring at the company “created complexity that does not support continued growth.”
“The changes we’re making — which touch every team at the company — are necessary for us to capture the massive opportunity in front of us given our significant market momentum and the mission critical nature of our XM platform. To get here, we conducted a deep review of every function in the company.
“The result is an organizational structure that will enable our teams to work better together, bring new innovations to market faster, and make it easier for our customers and partners to do business with us.”
A company spokeswoman said the layoffs will affect workers at all 26 Qualtrics offices, including the company co-headquarters in Provo and Seattle, but could not offer details on how many Utah-based employees would be impacted by the decision.
U.S.-based Qualtrics employees who lost their jobs Wednesday will be eligible for a minimum of 10 weeks of severance pay, depending on their job title and tenure, as well as health insurance extensions and other benefits, according to the company.
“To those who are leaving, I am truly sorry,” Serafin wrote in his email to employees. “I know this explanation doesn’t make it any better for you. On behalf of the entire company, thank you for everything you’ve given to Qualtrics, and for the chapters you have helped to write.”
Back in March, Silicon Valley tech investment firm Silver Lake, in partnership with Canada Pension Plan Investment Board, announced it had entered into an agreement to acquire Qualtrics in an all-cash deal worth $12.5 billion. The acquisition deal closed over the summer.
Silver Lake participated in Qualtrics’ 2021 IPO and, before the sale agreement, held a stake in the company just shy of 4.2%. Silver Lake, based in Menlo Park, California, is a technology-focused investment firm that holds around $92 billion in assets and is also heavily invested in another Utah-based company, property management software developer Entrata.
German software giant SAP acquired Qualtrics in November 2018 when it inked a mammoth deal to acquire the Utah-born customer experience innovator for $8 billion.
At the time, it stood as the highest valued acquisition ever for a venture-backed software company and, adding to the drama of the moment, the deal was announced just days before Qualtrics was scheduled to launch its own IPO.
Back in 2018, some market watchers criticized SAP for overpaying, noting Qualtrics’ pre-IPO valuation estimates were coming in at the $4.5 billion to $5 billion range.
But just two years later, that naysaying was rendered moot when SAP spun Qualtrics off in an IPO that raised $1.5 billion in fresh capital on a valuation north of $15 billion.
Qualtrics’ IPO redux in 2021 came just weeks after Smith was announced as the new majority owner of the Utah Jazz after closing a deal rumored to be worth $1.6 billion.
Smith kept a stake in Qualtrics following the IPO, and is reportedly the biggest individual shareholder while SAP retained a majority interest in the company.
Qualtrics was founded in 2002 by Ryan and Jared Smith based on technology first developed by Ryan and his father, BYU researcher and professor Scott Smith, amid the elder Smith’s successful fight against throat cancer.
Initially conceived of as a survey tool for academics, Qualtrics morphed into a set of tools and deep data analysis processes optimized for assessing clients’ business vitality, as viewed through the eyes of their clients and/or employees. This new set of analytics and insight theory has grown to become its own business category, and Qualtrics is both the progenitor and leader of the customer experience realm.
Qualtrics has some 20,000 clients in over 100 countries and reported nearly $1.5 billion in total revenue in 2022.