Seeing a lot of questions on hear regarding the potential layoffs and wanted to try answering a few of them. (Also, I'm not a lawyer and nothing in this post is legal advice.)
• How can Alteryx lay off 30-50% without a WARN notice?
WARN only applies to people who report to a single location. The law's fuzzy on remote workers who fully work from home. Some cases have said an employee's location is where they work (home) and not where they receive work. Others have said it's the nearest location or the corporate office.
Clearlake and Insight could arrange layoffs in such a way that they don't lay off 50 employees from one location and skirt around the law. They could also blatantly violate the law and not worry too much about it. The Department of Labor has no enforcement authority under WARN and does not investigate complaints or bring suits to enforce WARN. If Alteryx lets you go, you'd have to bring a civil suit proving Alteryx violated WARN. That's hard now that Alteryx is now under PE ownership and not a public company.
So, there's not much stopping Clearlake and Insight from letting hundreds of people go and not batting an eye.
• Why would Alteryx let 30-50% of their staff go? That's ridiculous!
It's not, really. The last quarterly earnings report before Alteryx went private showed us losing $179 million in 2023. We made $970 million in revenue and paid $1 billion in staff costs. There's no way Clearlake and Insight are just going to eat that money while waiting to turn Alteryx around.
All the talk about "cash injections" or "cash infusions" were just PE terms for leveraged buyouts or debt. They need to balance the books as fast. Even if they're not reporting to the public anymore, they are reporting to their private shareholders or investors. The quickest way to get back into the black and make money is to cut staff.
Even if you assume Alteryx loses about 7-10% of revenue in 2024, or about $900 million, to be profitable, Clearlake and Insight need to get operating costs down to about $850 million. If you assume the average employee costs Alteryx $140,000 in salary, that gives you about 1,000 to 1,100 employees to remove nearly $150 million from the operating costs. That puts the high end of the layoffs close to 50% of the company.
• Why would Alteryx string everyone along until after Inspire only to let them go?
The same reason people try to inflate the value of their homes before taking out a loan. You think Clearlake and Insight really wanted to honor equity? Not at all. They used it to keep people at Alteryx because it looks nice when you go asking people for a loan.
Again, "cash infusion" is just PE lingo for debt. The more people at their company, the higher the operating costs, the higher the loan they can ask for. Now that they have the money, they can get rid of people and use the earnings and debt to pay themselves and their investors.
Why do you think every executive leader has been feeding us the same lines about being excited about the opportunities we have? They all hung on to stop as many people as they could from jumping ship, then took their golden parachutes and departed before everyone was let go.
• All of this talk is just fear mongering. Where's your source?
You're on an anonymous board. What do you expect people to do, give you their name, title, department, and links to official documents?
This question is hard to answer with any good information, but the people on this site have a good track record of being right. More people confirmed layoffs in Q2 and Q3 of 2023 than said they weren't happening. More people also confirmed no layoffs in Q4 and Q1 of 2023 and 2024 than said they were happening. I'd go with the posts saying layoffs are coming here soon, but could be wrong.
There's also the stages of a PE buyout to consider.
Company reaches final stages of acquisition
Current leadership says nobody will be cut
Company is acquired
Leadership is slowly let go/replaced
First round of layoffs occur <<<<<< [YOU ARE HERE]
PE says layoffs were about reorganizing for a new direction
New leadership is brought in, a.k.a. the yes people
If company increases profitability, then PE might go public again
More likely, though, PE continues layoffs to ensure their and investors and them make money
PE sells company to highest bidder
What can we do?
This isn't legal advice, but here's what I would try to do. If/when the layoffs happen, I would reach out to as many people as possible to figure out who was also let go and if Clearlake and Insight violated WARN. I would put a list together. If the PE did violate it, I would reach out to an unemployment lawyer and encourage others to do the same. Each person can recover up to $500 per day for themselves from what I can tell.
I would also download any materials I need for a portfolio and get my resume ready. I would also start making an emergency budget and determining what I would need to do to file for unemployment and other benefits. Stuff takes time and it's better to be prepared.
Then I would breathe because I've been here before. The market's tough, but it's not impossible.
I hope this post helps.