Sorry seems to be tech execs' favorite word as DB player Aiven lays off 1 in 5
Finnish open source biz joins elite in correcting pandemic hiring frenzy
The boss of European database-as-a-service upstart Aiven is the latest tech exec to apologize to his workforce for making one in five redundant after recruiting too ambitiously in the past 12 months.
The Finnish open source DBaaS player inhaled $210 million of funding in May 2022, which valued the business at more than $3 billion. It was founded in 2016.
"We are planning to reduce our team size by about 20 percent and reshape our organization," said CEO Oskari Saarenmaa. "For those of you departing: I'm truly sorry. As the company founder and CEO, I take full responsibility for the difficult decision that I have made."
'Tis the season to be earnest. Google CEO Sundar Pichai last week told workers, in light of an uncertain economic outlook, that he'd erred in rapidly hiring during the pandemic and needed to correct it by removing 12,000 staff. Meta boss Mark Zuckerberg drew on his understanding of humans last autumn when he needed to demonstrate something close to empathy after ejecting 11,000 staff.
"One year ago the world looked very different than it is today," said Saarenmaa in his missive to workers. "The macroeconomic situation increased inflation, interest rates, and war in Europe have all had an impact on our business."
He said the "exec team" had also "made mistakes. Although we raised several rounds of funding in the last two years, we are in a situation where we need to make long term changes to our business and organization for sustainable growth."
The company increased headcount by 50 percent from March 2021, but as a privately owned entity it does not specify how many people it has on the payroll. It has offices in 25 countries including in Amsterdam, Boston, Paris, Toronto, Singapore, Sydney and Tokyo. All will be caught up in the redundancies. The Product team, however, will not.
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Saarenmaa said digital native mid-market customers – Aiven's sweet spot – were "most affected" by declining economy. He added that annualized revenue run rate was below estimates and the doubling of headcount "resulted in lack of focus and priorities."
The boss said he had been "too optimistic about the future and allowed our teams to grow too fast... The changes we are making will bring the team size back to approximately where it was at the end of summer last year."
Those leaving the business can expect 12 weeks of compensation, plus one extra week for each year worked. Unused "personal time off" – holidays – will also be paid and Aiven will allow departing colleagues to keep their work devices.
The pandemic smiled on the technology industry but in the past six months the mood music has changed, with Intel, HP, Amazon, Microsoft, Meta, Micron and more all beating a hasty retreat following a period of great excess. ®