Earlier today, Lokalise Co-founders Nick Ustinov and Petr Antropov sent the following note to the Lokalise team:
Today, we’re reducing the size of our team by 23%. This is one of the hardest decisions we have had to make in our careers and it is not one we reached lightly. In total, 76 Lokalisers will be affected. We want to extend our thanks and gratitude to you for your hard work, and let you know how sorry we are that we have had to make this decision. We’re doing this now to build a more effective Lokalise.
There is not a lot we can say to make this easier, but we hope the details below will make this decision clearer.
Why are we doing this?
There are two reasons: the market and our own decisions.
From 2020 into the early part of 2022, our revenue, along with most other tech companies, grew rapidly. Companies were expanding internationally, the demand for localization was growing, and so were the tools and platforms supporting growth and efficiency, including Lokalise.
Like many other companies, we planned for continued growth that has not materialized due to a slowing global economy. Now and during the first half of 2023, we expect our customers and prospects to be more frugal about their spending and investment in new technologies.
The market has not only challenged us, we also underestimated the market dynamics. We take the responsibility for our decisions, specifically:
- We hired too fast and underestimated how to integrate 200 new team members into our business. As a result, our aggressive top-line growth came at a price that was not sustainable in the long run.
- In order to meet our audacious growth goals, we tried to pursue too many opportunities at once, which led to a lack of clarity and prioritization for our teams.
- And finally, we made some bets that did not pay off as quickly as expected. We directed much of our efforts towards them, losing focus of the operational efficiency required to make them happen.
Where are we making changes?
Almost all of our teams will be affected, but not all equally. Our Operations Teams will be impacted most due to a slowdown in hiring. Sales and Marketing will be shaped for greater efficiency. Product and Engineering will be affected least, reflecting our priority to build the best product for our customers.
For those departing
Everyone will be impacted differently by this decision. To help Lokalisers during this transition period, we are offering a package that includes:
- Pay: 3 months of pay
- Healthcare: 3 months of healthcare contributions
- Equity: extension of our exercise period for stock options from 90 days to 3 years. Also, we are removing the 1-year vesting cliff for those that passed the probation
- Mental support: access to Plumm for 3 months, our partner for mental wellbeing
- Career help: helping departing team members to find career opportunities
The package and next steps will be discussed with all departing Lokalisers during individual conversations throughout today.
For those staying
This will not be an easy time for many of you. It’s okay for you to be angry, frustrated, and sad. We will support you with everything you will need to adapt to these changes. Next week, we will roll out our adjusted company strategy. This will provide us with a clear focus and help us make the right decisions.
We are convinced there is a great opportunity for localization ahead as companies look for new ways to grow with fewer resources. We believe the localization industry can weather this economic downturn. The market for language tech is unsaturated; there’s a blue ocean of companies who will be interested in starting with Lokalise as soon as possible. Even as market conditions become tougher, we have a strong core business with a promising future ahead.
Although we are convinced about our future, today is a tough day. This week, our focus is on supporting Lokalisers who are leaving.
Next week, we will regroup within our teams to talk about the future and find out how we can together build a stronger Lokalise.
Nick & Petr