commercetools Layoffs Likely Signal IPO Plans on the Shelf, For Good?
It's never fun speaking about layoffs, but this is part of what's going on in the commerce world as well. I'm not an insider anywhere - on purpose, just someone who tries to pay attention.
What happened - this was reported by TechCrunch according to a verified internal memo:
* commercetools laid off ~10% of its staff
* Restructured its management team, including departures of the CFO, CRO.
* Marketing realigned to focus on Enterprise.
The CEO, also gave a few choice words, which hard to say if they were taken out of context:
* "We had really ambitious goals that we had not reset to reflect the macro-economic uncertainty" .. and .. "cited question marks over how tariffs would play out as another factor impacting e-commerce companies, and the knock-on effect that has on suppliers like Commercetools."
I don't love these words from the CEO, even a new CEO who likely had not much responsibility for past performance. The buck stops here, and these words passed the buck down the street.
How about: "We aren't growing fast enough and some of our expansion areas into new markets haven't panned out - instead we are reorienting towards our strengths". Which.. he did say some of this, but the reason why is the part I didn't love.
My read is clear:
* There will be no IPO in the next couple of years (ever? hard to say), unless something significant changes. The CFO who came on over a year ago was widely believed to have done so in order to help take the company public. Now the company has no CFO at all.
* commeretools mid-market activities, which to my read (and likely the company's) have not been extremely effective - are likely ceasing... commercetools is viewed in an Enterprise light and the company does not have the ability to change that perception/reality anytime soon.
* I do still expect further expansion beyond Retail into the other verticals they have already been targeting.
* Employee attrition has also happened. In the past year or so, Shopify has notably picked up some commercetools sales executives as it continues to move up-market. And it goes without saying that my friend Kelly - in many ways one of the most visible public faces of commercetools - departed early this year.
Probably not just employee attrition. Customers too? Speculation. Speaking about headless for a moment, some retailers during COVID got caught up in an infrastructure they could not easily support (not that it is unsupportable in practice, but it is also easy to screw up by the wrong implementor) -- and some retailers have migrated away from it. I would not be surprised if some of the "growth" issues have an attrition element to them too.
All told, no IPO soon. and until growth rebounds, maybe never. And so the IPO market turns. Shipbob and Klarna on deck? Bueller?
