Kaseya Calls Scores Of Employee Cuts ‘Performance-Based Terminations’

Kaseya cut scores of sales employees in a move the company described as “performance-based terminations” this week.

The positions that were impacted will be “backfilled,” according to a statement from Xavier Gonzalez, Kaseya’s chief communications officer.

“There were no layoffs,” he said. “We had performance-based terminations, and all those roles will be backfilled. Kaseya will backfill each role with dedicated professionals who will prioritize our customers’ success and better align with our company goals. It’s also important to note that Kaseya has hired approximately 1,000 people in Miami alone since the start of 2023, and now employs over 5,000 people globally.”

The company has not immediately responded to repeated requests from CRN about the exact number of cuts made. Gonzalez earlier told the South Florida Business Journal that the Miami-based company had cut 150 workers.

[RELATED: Kaseya’s Miami Heat Arena Naming Rights Brings Mixed Reviews, Community Program Funding: 5 Things To Know]

One of those who was cut told CRN they saw documentation that showed they were one of 300 cut in Kaseya’s two downtown Miami office buildings.ADVERTISEMENT

“They said ‘laid off’ verbatim in the meeting and that unemployment was effective immediately,” said one account manager who was cut. “They gave us a promise in the sales kickoff that they wouldn’t be letting go of any employees, if anything they’d be hiring employees because we had a $7 million stipend from Miami to hire more people. It turns out they fired half of their go-to-market workforce in Miami.”

The employee—who was given a $250 check for their severance—said they were called into a room with 40 people for a performance review and told they were being let go.

“They said we were all being laid off, yet sent nothing in writing,” the now-unemployed sales representative said. “They say it was based on performance, but they also fired people who met their quota.”

Kaseya, which relocated to Miami in 2018, has been active in local government, submitting the winning $117 million bid a year ago to rename the city’s NBA stadium the Kaseya Center. At the time, Kaseya said it had access to $400 million in revolving credit, and it gave the county a $7.5 million “irrevocable letter of credit” to guarantee it could keep the naming rights.

Additionally, local news outlet Miami Today reported on Feb. 16, 2023 that Miami-Dade county commissioners voted on a total of $4.5 million in targeted performance-based incentives for Kaseya to be paid over the next five to 10 years” in exchange for hiring 3,400 workers.

Kaseya did not reply by publication time to a question regarding how these job cuts would impact that incentive.

Some of those who were terminated took to LinkedIn to express their shock at being let go and to begin the look for work.

Evan Margulies, a director of enterprise sales for mid-market at Kaseya, wrote on LinkedIn that he was proud of the work he and his team accomplished and was surprised to be among those cut.

“Tuesday was the toughest day of my career and my last day at Kaseya. Only two words can sum it up: Shocked and Heartbroken,” wrote Margulies.

Phil Walker, CEO of Manhattan Beach, Calif.-based Network Solutions Provider, said he believes the cuts are due to some of the Datto product integrations. Kaseya bought rival Datto in 2022 for $6.2 billion.

“Products change, and how we’re selling it changed,” he said. “Post-Datto acquisition, I think integrating all those products changed the sales landscape. They brought on all of their competition. If I’m a sales rep that has to bring in net-new business and I’ve been chipping away at Datto for years, who am I chipping away at now?”

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