TD Synnex Offers Voluntary Severance Program For US Employees
‘The hiring freeze and travel restrictions have helped but have not been enough to get us where we need to be,’ says Rich Hume, TD Synnex CEO, in an internal memo.
Distribution powerhouse TD Synnex is offering voluntary severance packages to its U.S. employees citing macroeconomic conditions and challenging industry trends.
In an internal memo from CEO Rich Hume to employees, which was obtained by CRN, Hume said the voluntary severance program can “acknowledge the contributions and experience of our dedicated co-workers with enhanced benefits.”
“This has been driven by the need to reduce our costs due to current macroeconomic conditions, including challenging industry trends (primarily across the PC ecosystem), which you heard me reference in our earnings call last month,” Hume wrote in the memo. “The hiring freeze and travel restrictions have helped but have not been enough to get us where we need to be.”
TD Synnex had approximately 23,500 full-time co-workers globally as of November 30, 2022, according to a regulatory filing in January of this year.
During its second quarter investor relations call in June, the company reported revenue of $14.1 billion, down 7.9 percent from the prior year’s second quarter, and down seven percent in constant currency. Non-GAAP gross billings were $18.7 billion, down 4.9 percent from the prior fiscal second quarter. Operating income was $253 million, flat from the prior fiscal second quarter. Non-GAAP operating income was $376 million, down 5.6 percent from the prior fiscal second quarter.
“TD Synnex initiated a one-time voluntary severance program in the U.S. for co-workers who are at least 58 years of age and have at least five full years of service to the company,” a spokesperson from TD Synnex said in an email to CRN. “This program will enable us to streamline our business in service to our customers and vendors in alignment with the macroeconomic headwinds and cost-savings initiatives we mentioned during our second quarter FY23 earnings call. By offering a voluntary severance program, we are able to acknowledge the contributions and experience of our most dedicated co-workers, giving them the option to consider a new chapter with some added support.”
Synnex and Tech Data merged to create TD Synnex in September 2021 to form a $59.8 billion entity, making the new company the largest distributor in the channel.
The executive leadership team, Hyve co-workers, hourly logistics co-workers, hourly Shyft co-workers, part-time co-workers and any employees who have already given their resignation notice are excluded from the program, according to the memo.
Eligible employees have three weeks to make their decision.
Mike Kiani, president of Irvine, Calif.-based MSP and TD Synnex partner MK Management Inc., said while it’s unfortunate the company is offering buyouts, he’s not surprised.
“It’s just what’s happening in the market,” he told CRN. “It’s extremely sad, but it’s not just them. You see a lot of larger companies doing the same thing. It’s just challenging and it’s affecting everybody.”
In order for the company to be profitable, the firm has to make cuts in order to survive, he said. “Hopefully over time they’ll get stronger and hire people back,” he added.
Michael Goldstein, CEO of LAN Infotech, a Fort Lauderdale, Fla.-based MSP, said many in the industry are moving towards self-service, “So I don’t need to call and talk to people. Because of all the automation that’s out there, I’m sure there’s room to squeeze the budget.”
As a partner, he doesn’t have any concerns as many tech companies have had layoffs this year.
“I think everyone built up during the pandemic and now we’re just at that point with economic conditions that all the stars are aligning in dollars and cents,” he told CRN. “I think they’re doing what they have to do to keep going.”