Sonatype axes 14 percent of staff, reminds them not to talk to the press

Exclusive Software supply chain management biz Sonatype has laid off 14 percent of its global workforce, according to internal documents seen by The Register.

The job cuts, which started on Tuesday, hit about 100 people across Sonatype's sales, marketing, engineering, customer success and GA teams, according to an FAQ sent to employees this week marked "confidential." This includes workers in North and South America, Europe, and Asia-Pacific.

"This workforce restructure does not reflect systemic issues in our business, threats to our vision, or an absence of investment going forward," Sonatype president Alex Berry said in an email to staff and seen by The Register. 

"Rather, we made this decision in order to shape the organization needed for Sonatype to maximize our future potential and success in the marketplace," Berry wrote. "Going forward, alignment across teams will be essential to our success." 

While layoffs are never fun at any organization, and are happening around the IT industry right now, one person familiar with the situation at Sonatype told The Register the way upper management handled the cuts at the business "has been a total shit show, truly horrendous. No one had a clue, not even higher up engineering managers."

For comparison: when Snyk, a developer security company, axed 128 employees, or about 10 percent of its workforce, last month in a similar cost-cutting and reorganization effort, Snyk CEO Peter McKay made public a version of the all-staff email he sent announcing the layoffs.

There are better ways to do it than this

Sonatype, on the other hand, assured staff there would be no cuts, and then out of the blue gave employees strict instructions not to talk to the press and swung the ax, we're told by those familiar with the situation. It also did not put out any announcement of the cuts.

"Some folks have been here for four to five years and got a quick call in the morning before being let go without any prior notice," said one source, adding that during recent company-wide meetings, execs repeatedly told staff they have nothing to worry about. "Now everyone feels lied to and kept in the dark." 

We've also seen screenshots of internal Slack conversations in which staff were able to post goodbyes before their accounts were deactivated.

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In the FAQ sent to Sonatype employees who survived the cuts, management cited reasons for the layoffs that, by now, are all too familiar to anyone working in tech: external inflation, economic headwinds, customers' doing their own belt tightening, and an organizational structure with "unnecessary layers and top-heavy teams."

So Sonatype "flattened the organization," in a move that will "empower employees through improved speed of decision-making and greater opportunities to grow careers." Unless they are among the 14 percent, that is.

"Although we have taken steps over the past 18 months to try to avert a workforce reduction, we find that we must take this step to create a path to financial strength and resilience for the company," the document added.

The business is also undergoing a restructuring and plans to refocus on three key areas: cloud, a higher customer renewal rate, and "acquiring strategic new logos," by investing in partnerships with AWS, ServiceNow and Anaconda.

Restructuring efforts include creating a new office of the CTO led by Brian Fox and a brand new go-to-market operations and strategy department led by Craig Vaughan. 

The document also instructs employees to "not engage" with members of the media inquiring about the job cuts and says to "pass them directly" to Sonatype's global marketing chief Katy Hiller.

Impact

In a statement, Hiller confirmed the extent of the layoff, telling us: "Sonatype has conducted a restructure to better position the company to provide customers with the best possible software supply chain management solution, accelerate Sonatype’s growth, and extend our ability to serve market needs.

"As part of this restructuring, we plan to reinvest directly in product development to advance the delivery of platform innovations (including SaaS and new UI/UX), create deeper integrations with partners, and continue to focus on a world-class customer experience.

"Unfortunately this restructuring included a reduction in workforce affecting approximately 14 percent of the organization, across all functions and geographies. We take seriously the impact this decision has on our employees - as well as their families - and are grateful for their hard work and contributions to the company." ®