Introduction

Australian Unicorn Culture Amp lays off 8% of its workforce as it feels hit by the economic slump caused by COVID-19. With an overall strength of 446 employees, the Melbourne-based people and culture platform had to cut 36 jobs. According to the Australian Bureau of Statistics, the unemployment rate went from 5.2% to 6.2% between March 2020 and April 2020. While some companies are laying off people, some are keeping mass job hires on hold.

Co-founder Didier Elzinga said that though they are still building products and working with customers, the pandemic has slowed the growth rate to about 50% of what it had predicted before COVID-19.

What the founders at Culture Amp say about the lay-off

Mr. Elzinga says that the company made it a point at the beginning of the pandemic of not laying off anyone, but they got to the point where they had to figure out what the right size is for the company to move forward.

He says that they needed to make the Culture Amp team a little bit small. He adds that though it was not a life-or-death situation, in fact, he considers himself “lucky in a sense”, as they just had bagged a $120-million funding in September 2019 at a valuation of just about $1 billion. He says that they have a long runway and when he looks forward, he doesn’t how much longer it’s going to stay like this. “The plan is to be able to withstand that and last as long as possible,” says  Mr. Elzinga.

See Also: Uber lays off another 350 over Eats, self-driving and other departments

More about Culture Amp

Culture Amp is a people and culture platform that makes collecting and analyzing employee feedback easier for employers. It was found in 2009 and is based in Melbourne. Culture Amp works with around 2,750 companies globally with more than 2.5 million employees. Though there is a JobKeeper program in Australia, Culture Amp was not eligible for the same as turnover was only down 15% in Australia. 

The JobKeeper Payment programme is the Australian government’s economic response to coronavirus. Under this programme, employees and workers are to receive a payment of $1,500 (before tax) through their employers.

Mr. Elzinga said while companies like Culture Amp are not directly affected by the pandemic, they still have had to bear consequences of the economic slump. He added that they have customers that are going into bankruptcy and companies that had a staff of 20,000 that now had to cut down to 10,000.

According to the Australian Bureau of Statistics, 800,000 Australians have already lost their jobs as of April 2020. Though the Australian government is taking steps, like the JobKeeper programme, to support the citizens, the economic slump might affect businesses in the coming days.

Conclusion

The COVID-19 pandemic has undoubtedly impacted companies across the globe, and Culture Amp is no exception. Although the company had hoped to avoid layoffs, the slow-down in growth forced them to make difficult decisions, including reducing their workforce by 8%. Despite this setback, Culture Amp is in a relatively strong financial position, with $120 million in funding and a solid customer base. This situation highlights the resilience required from companies to navigate uncertain times. As the pandemic continues to affect the global economy, companies will have to balance short-term decisions with long-term sustainability. For more updates on the latest tech and business news, keep reading iTMunch!

FAQs

  1. Why did Culture Amp lay off employees?
    • Culture Amp laid off 8% of its workforce due to the economic slowdown caused by the COVID-19 pandemic. Despite strong funding, the company faced a reduction in growth and had to adjust its size.
  2. How many employees were affected by the layoffs?
    • 36 employees were laid off from Culture Amp, which had a total workforce of 446 employees.
  3. Is Culture Amp eligible for Australia’s JobKeeper program?
    • No, Culture Amp was not eligible for the JobKeeper program as its turnover had only decreased by 15% in Australia, which is below the required threshold.
  4. What is Culture Amp’s business model?
    • Culture Amp is a people and culture platform that helps organizations collect and analyze employee feedback. It works with around 2,750 companies globally.
  5. How has the pandemic affected businesses globally?
    • Many businesses, including Culture Amp’s customers, are facing financial difficulties due to the pandemic. Some companies have gone bankrupt, while others have been forced to reduce their workforce significantly.
  6. What is the JobKeeper program?
    • The JobKeeper Payment program is an Australian government initiative designed to provide financial assistance to businesses affected by the pandemic, enabling them to retain employees during tough times.

Source

[1] Australian Bureau of Statistics (2020) “6202.0 – Labour Force, Australia, Apr 2020” [Online] Available from: https://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0 [accessed May 2020]