Cloud Software Vendor BlackLine To Cut 9 Percent Of Workforce
Wade Tyler Millward
BlackLine frames the layoffs as “a restructuring plan that is designed to support the company’s growth, scale and profitability objectives.”
Cloud-based accounting software vendor BlackLine Systems plans to lay off about 9 percent of its global workforce, which comes out to 166 people losing their jobs.
The Woodland Hills, Calif.-based company with a market capitalization of $3.26 billion framed the layoffs as “a restructuring plan that is designed to support the Company’s growth, scale and profitability objectives,” according to documents filed with the U.S. Securities and Exchange Commission.
Layoffs starting in October will include 95 employees at its headquarters and 21 people from a location in Pleasanton, Calif., according to documents filed with the state of California.
CRN has reached out to BlackLine for comment.
BlackLine has a partner program for consultancies, solution providers, business process outsourcers and other partner types, according to the vendor’s website. BlackLine partners include Accenture, Capgemini, Cognizant and RSM, all members of CRN’s 2023 Solution Provider 500. And two BlackLine executives received 2023 Women of the Channel Awards from CRN.
BlackLine expects to pay up to $9 million in severance, termination benefits and other costs related to the layoffs, according to the SEC filings. The vendor will recognize the expenses in the third and fourth quarters of its 2023 fiscal year and will “substantially” complete the process during the fourth quarter. BlackLine expects about $28 million in annual gross cost savings by the end of 2024 through the layoffs.
On Aug. 8, BlackLine reported the financial results for its second fiscal quarter, which ended June 30.
The vendor reported $144.6 million in GAAP revenue, up 13 percent year over year. GAAP net income was $30.8 million. The year prior, BlackLine reported a $10.7 million GAAP net loss.
BlackLine saw free cash flow of $18 million during the quarter and an operating cash flow of $24.6 million, up more than four times the operating cash flow for the same period a year prior, according to the vendor. It had about 4,300 customers and 378,000 users as of June 30.
On the accompanying call with investors in August, co-CEO Owen Ryan told listeners that the vendor sees “opportunity in reshaping and optimizing our global partner network to deliver more consistent performance and further profitable growth.”
Partners were involved in 80 percent of large deals that quarter, driving net-new and expansion deals globally, he said. The vendor’s partnership with enterprise applications giant SAP represented 25 percent of total revenue.
“We are working to drive greater accountability and alignment across our partners and clearly defining what we expect from them and what they can expect from BlackLine in return,” Ryan said, according to a call transcript. “Importantly, we are accelerating the transition of partners from enablement to commercialization. … As we move forward, we’re trying to make sure that we have the right partners with the right incentives to drive our mutual success.”
BlackLine is not alone in reducing its headcount as companies in the U.S. face high inflation, rising interest rates and the potential of a recession. Other tech companies to recently announce or conduct layoffsinclude Malwarebytes, Google, Dell Technologies and Slalom.