UK-based event tech unicorn Hopin is laying off 12 percent of its workforce, including four members of the senior management team. Does the downsizing point to a real decline in business or just some housecleaning after riding the wave of virtual meetings?
The company has confirmed that it is letting go of approximately 138 full-time employees. This number does not include contractors or third-party support.
EventMB has learned from an anonymous source that among those laid off are four members of the senior management team at VP level or above and also a dozen or so directors and senior directors. Hopin Chief Marketing Officer Anthony Kennada used LinkedIn to announce he’s voluntarily stepping down from the leadership role and taking a sabbatical, but making no reference to the other layoffs. Hopin’s Head of Trade Shows, Matthew Donegan-Ryan, shared news of his departure on LinkedIn and the dissolution of Hopin’s entire trade show division.
In a statement from a company spokesperson, Hopin attributes the layoffs to “unprecedented growth and several acquisitions” leading to the need for “reorganizing to align with our goals for greater efficiency and sustainable growth”.
Gergely Orosz was the first to report on the matter as several of the staff who were laid off took to LinkedIn to share their personal news. It’s worth noting that many of the posts on LinkedIn included comments from recruiters and representatives of other technology companies who appear keen to hire.
In his analysis, Orosz is critical of Hopin’s undefined market positioning and concluded that “Hopin’s biggest problem is how they were blindsided by demand during the pandemic and were unprepared for the post-COVID world.” Orosz compares the layoffs to what is happening at exercise equipment and media company Peloton, which recently laid off almost 3,000 staff and removed its CEO.
TechCrunch reported that Slack messages had been leaked in which CEO Johnny Boufarhat discusses the layoffs internally. The messages mention the need to solve overlaps and duplications, presumably stemming from the company’s five acquisitions between November 2020 and June 2021. Boufarhat also refers to the need for greater “financial discipline” and “organizational rigor”, all of which suggests investors are not satisfied with the current structure.
Hopin last raised funds in August of 2021, when it announced a record-breaking $450 million Series D round of funding, at a mouthwatering valuation of $7.75 billion. The company has raised over $1 billion to date from some of venture capital’s biggest names and made no secret of its intent on going public. Just last Wednesday the company shared the news of being named the fourth fastest-growing software on the G2 business software review platform.
As early as March of 2021, EventMB raised the possibility that Hopin might be overvalued. At the time, its valuation represented 80 times its annual recurring revenue (ARR) of $70 million — compared with a stock market average of around 20 to 25 times. It was clear that both Hopin and its investors expected the company to continue growing at the rapid pace witnessed during the height of the pandemic.
These layoffs may simply be a sign that Hopin’s growth estimates were overblown, or it could be an early indicator that virtual event tech vendors will struggle in a post-Covid world where the switch to a hybrid event format is still nebulous at best. Hopin may be the most visible example of this due to its impressive unicorn status, having gone from 1 to over 1,000 employees in less than three years.
There is some positive news for the staff laid off. All staff impacted is to receive three months of compensation, including health benefits, and Hopin will remove the one-year cliff for stock vesting. Previous staff members will also get to keep their laptops and an external recruitment agency has been brought on to assist with placing those impacted.