Earlier today, NEXT’s CEO and co-founder, Guy Goldstein sent the following message to NEXT employees.
Team,
Today, I am making an incredibly hard decision to part ways with many of our friends and colleagues in an effort to adapt to the worsening macroeconomic environment and to secure the long term vision of the company. To that end, our plan is to reduce the size of our workforce by 17%.
This is one of the hardest decisions I have made in my professional life and one I take very seriously. As difficult as this is, it is my responsibility to adjust our priorities in light of the new reality of market conditions and to accelerate NEXT’s goals to become profitable.
I believe these changes will ultimately preserve our position of leadership in the market and more importantly will allow us to fulfill our mission to help entrepreneurs thrive.
Why we made the decision:
- Worsening economic conditions: Over the past several months we have seen a tremendous deterioration in capital markets, both public and private. Furthermore, market conditions put a strain on the economy and the small businesses we are committed to serving. We are preparing to weather the coming economic conditions so that we can remain a stable safety net for our customers who put their trust in us.
- Focus on profitability for long term stability: In the last six years, since we were founded, we invested heavily in building our product foundation and growing our customer base. In 2021, we tripled the business and we are on track to well exceed $800M in sales in 2022. However, the way we are going to play to win in 2022 and beyond is very different from 2021. In previous years we built a plan that leveraged the availability of capital to invest and scale the business. Now, we need to shift to prioritize profitability.
- Managing costs: After evaluating our plans for the coming years, we determined our expenses are too high for our current revenue and insurance capital requirements. We have worked hard to maintain the stability of our team while trying to retain all of our valued team members. Earlier this year we reduced operating costs, discretionary spending, marketing spend and consolidated functions for greater efficiency. However, in order to set NEXT on a clear path to becoming profitable, I was left with the hard choice to reduce the size of our team.
What will happen next:
Because we are a global team, we must consider multiple time zones and adhere to various requirements for notifying employees and it is important you hear the news from me first.
Our People team will be contacting individuals that may be impacted by this workforce reduction over the course of the morning on July 7th, local time. Employees across our offices can expect the following:
- In Israel, potentially affected employees will receive a letter notifying them of their hearing meeting
- The formal hearing process in Israel will start three business days after the hearing notification on July 12th and 13th. There will be no final decisions regarding affected employees until that process is complete
- In the U.S., affected employees will be invited to a direct conversation with their People partners and senior team leaders
How we are supporting affected employees:
We want to support those impacted to the best of our ability during this transition. To that end, departing employees will receive severance that also includes extended company-paid medical benefits and mental health services, if applicable, the option to keep their company laptop and office equipment and job search support.
To our colleagues who are departing, I’m sorry. You are talented and unstoppable and I have no doubt that NEXT would not be where it is today without each of your contributions. I hope we can keep in touch and thank you so much for all of the hard work you’ve done for the company.
To our team that is staying with us, this is a difficult day as we part ways with many of our friends. I understand that this news will take time to process and that there will be many questions along the way. I will be holding a virtual town hall meeting for an open conversation with myself and the executive staff. I will also share more details on our strategy going forward. Also, please note that all physical offices in the U.S. will be closed on July 7th and 8th.
NEXT’s market opportunity and our goal to become the number one insurer for small businesses in the U.S. remains unchanged. I believe we will come out much stronger on the other side of this.
Thank you
Guy
This blog post contains forward looking statements. These forward looking statements may differ from actual results due to a variety of factors.
