Vimeo is laying off 11 percent of its workforce, its second major reduction in a year

A blog posted today by CEO Anjali Sud informed Vimeo employees that another 11% of the workforce will be laid off.

Vimeo focuses on delivering high-definition video to all devices. Vimeo’s software as a service business model.

The cuts come six months after Vimeo cut 6% of its workforce in July 2022. Sud blamed “further deterioration in economic conditions” for the latest round of cuts. She blamed “ongoing geopolitical conflicts, rising interest rates and fears of a global recession” as the culprits behind the crash.

Sales and R&D will be the target of the recent layoffs. Both departments make up the majority of the company’s employees, Sud said.

The company is an independent, publicly traded company. Vimeo reported revenue of $108.1 million from 1.6 million subscribers in the third quarter

Sud’s full blog post:

Dear Vimeans,

Today we made the decision to reduce the size of our team by 11%. Everyone whose work was affected received an email and an invitation to meet their team leader and HR. To those who are leaving us, we are so grateful for your contributions and will do all we can to support you. I will contact you directly to offer my assistance.

It was a very difficult decision that affects us all deeply. It’s also the right thing to do to enable Vimeo to be a more focused and successful company that operates with the discipline needed in an uncertain economic environment. This allows us to invest in our growth priorities and maintain profitability while continuing to innovate to bring the power of video to every business in the world.

Why are we doing this again? Why now?

Last summer we made a commitment to make Vimeo a sustainable profitable business. We delivered on that commitment by delivering positive adjusted EBITDA and free cash flow in the third quarter of 2022, but as we discussed previously, our bookings and revenue trends require continued cost discipline to stay on that path going forward.

A lot has changed since we reduced our workforce by 6% in July. We have seen a further deterioration in economic conditions in the form of protracted geopolitical conflicts, rising interest rates and fears of a global recession. We also have a better understanding of where post-pandemic demand is headed and how it may impact our self-service growth in the near term. Finally, we have a new leadership team with a clear plan to focus our investments on two business priorities: revitalizing self-service and doubling down on Vimeo Enterprise.

Last quarter, we took action to streamline our non-employee spending, from marketing spending to fringe benefits to office space. However, our team remains our biggest cost factor as a company. We’re entering 2023 with a more focused strategy to simplify Vimeo, and ultimately our team size and composition should reflect that focus. This reduction allows us to achieve our growth and profitability goals in a way that is much less dependent on the broader market, giving us full control of our destiny.

Who is affected?

We are reducing costs in two ways: firstly in structural areas of our product and business, where we decided to significantly reduce focus and investment in 2023, and secondly by streamlining team sizes across the business to work more efficiently. As a result, Vimeo offers discounts in almost all regions and departments. The majority of those affected are in sales and research and development, as these departments make up the bulk of our overall workforce. We will share details at a town hall tomorrow about which product and business areas are most affected.

We care about the people who are leaving us and will support them financially and temporarily, similar to what we have done in the past, with some improvements. While we are not publicly sharing the names of affected employees, we are providing transparency about who to contact for critical work in progress during our transition.

What’s next?

We have proven time and time again that as a company we can do difficult things. I am proud of our agility and resilience, but I also know that we must now come together with humanity.

Thank you to those who have left us. I want you all to know how passionate we are about your future and experiencing the lasting benefits of this community as you progress in your career.

For the rest of our team, we enter 2023 with more clarity and structural alignment than ever before. I believe in our strategy and in our collective ability to execute it, as do many others. The future of work will be video-first only, and in tough economic times, the world needs simple and innovative solutions to better communicate and connect. Let’s focus today on showing humanity and caring in front of our colleagues. We will meet tomorrow at 9:00am ET to deliberate and reset so we can move on next week.

Only,
anjali