ConnectWise Carries Out ‘Large-Scale’ Layoffs Due To COVID-19

ConnectWise carried out “large-scale” layoffs Tuesday as part of what CEO Jason Magee called a “tough decision” to make the ITSM platform healthier for the long term, according to the company and two sources.

“This decision was hard, but purposeful,” Magee said. “It allows us to remain healthy and puts us back on track to execute against our plan, so we can continue to invest in strategic areas that will move the company forward: making our products more secure, creating a unified platform, transforming partner experience, and helping our partners achieve their vision of success.”

One source told CRN that the layoffs at the Tampa, Fla.-based business automation software provider were “large scale,” while another said some of those cut were assigned to the ConnectWise Automate platform. That unit was rumored to have lost 4 percent of its workforce in yesterday’s cull.

“We had a plan in place for 2020 for our business, that allowed us to align and invest for the future. Like many others, as a result of COVID-19 and the continued global economic uncertainty, we experienced a disruption in our ability to execute on those plans and needed to make the tough decision to pivot on our approach,” Magee said in a statement.

Longtime ConnectWise partner Mark Essayian, who runs KME Systems, an MSP in Lake Forest, Calif., said he was sad, but not surprised to hear the news.

“I think partners have overbought subscriptions,” he told CRN. “So at time of renewal, you have to be careful with all expenses, perhaps you cut your subscription level as your sales forecast is lower due to pandemic. Also – there is probably overlap between CW and Continuum so that’s a factor. Private Equity has to show returns, I get it. Let’s hope they carefully reduce where they need to but keep support and product improvement at high levels.”

In his letter, Magee said the cuts were “tactical.” ConnectWise later confirmed that “4 percent of the entire workforce was impacted yesterday.”

“The cuts were tactically made across the company, and ConnectWise is in a healthier position to better invest resources where partners need us most. It ensures we can continue to be resilient and flexible to ongoing change and need, better enabling both our partners and ConnectWise to persevere together in our combined future.”