Qualtrics lets go 780 workers to simplify its organizational structure – SiliconANGLE

Qualtrics International Inc. today announced that it is laying off approximately 780 employees, or about 14% of its workforce, in a bid to simplify its organizational structure.

The restructuring comes a few months after the former SAP SE unit was acquired by two investment firms in a $12.8 billion deal. 

Qualtrics develops a so-called experience management platform, Qualtrics XM, that enterprises use to collect feedback from employees and customers. A software team could use the platform to ask customers for their opinion of a feature idea before implementing it. Human resources professionals, in turn, can distribute quarterly surveys via Qualtrics XM to measure employee sentiment.

Over the past few years, Qualtrics has expanded its focus to a number of adjacent areas. The company’s platform can now not only collect user feedback but also scan that feedback for useful patterns. Under the hood, Qualtrics uses artificial intelligence to power many of its analytics features.

One of the company’s flagship AI features, Text iQ, can analyze a large number of survey responses and identify the topics they discuss. The tool could, for example, determine that respondents provided feedback about an e-commerce company’s products and delivery times. Text IQ can then visualize respondents’ sentiment about each topic, as well as update the visualization when new data arrives.

In a memo to employees, Qualtrics Chief Executive Zig Serafin (pictured) said that the layoffs announced today were necessary because the company’s organizational structure has become too complicated. That complexity, he detailed, was the result of a hiring push carried over the past few years. “Simply put, the organizational structures, work processes and the way we made decisions previously don’t work for the company we’ve become, or the company we aspire to be,” Serafin wrote. 

Employees affected by the layoffs will receive at least 10 weeks of severance pay, health insurance eligibility and equity vesting. Qualtrics will also pay out outstanding quarterly, experience and wellness bonuses.

As part of the restructuring, the company plans to move several hundred employees to new roles or locations. The goal is to streamline go-to-market and product development activities. Qualtrics expect to complete this part of its restructuring initiative within a year. 

“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,” Serafin wrote.

The layoffs come a few months after Qualtrics was acquired by private equity firm Silver Lake and CPP for $12.8 billion. The software maker previously traded on the Nasdaq. After buying a company, private equity investors often implement cost-cutting measures such as layoffs in a bid to improve profitability.

The road that led to Qualtrics’ recent $12.8 billion sale itself started with a round of layoffs, albeit at a different company: SAP.

SAP acquired Qualtrics for $8 billion in 2018. Two years later, it listed the company on the Nasdaq in a $1.55 billion initial public offering. SAP retained a 71% stake in Qualtrics following the IPO.

This past January, SAP announced a restructuring initiative aimed at redirecting more company resources to its core focus areas. As part of the move, the software maker laid off about 3,000 employees. It also announced plans to sell its 71% Qualtrics stake, which is what ultimately led to the latter company’s acquisition by Silver Lake and CPP.

In its last earnings report before going private, Qualtrics reported revenues of $409.8 million for its fiscal quarter ended March 31. That represented year-over-year growth of 22%. Qualtrics’ adjusted net income more than tripled in the same time frame to $14.3 million. 

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