JumpCloud Restructuring

Written by Rajat Bhargava on January 18, 2023

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Today I’m sharing one of the toughest things I have had to communicate in JumpCloud history. I’ve made the difficult decision to restructure our business. As a result, we eliminated roughly 100 JumpCloud positions (approximately 12% of our total workforce) and said goodbye to colleagues, friends, and members of the JumpCloudian family. I want to share the email I sent to the company, and provide a bit more context.

All – after a lot of deliberation and thought and for the health of the business, I’ve decided that we need to restructure the company. As part of the restructuring, we’ll be parting ways with roughly 100 of our colleagues today or about 12 to 13% of our total team including contractors. This is one of the hardest decisions I’ve had to make and, frankly, it’s just not a path I’ve ever wanted to go down.

We’ll spend today focused on those that are losing their jobs and tomorrow, we will hold another All Hands to answer questions and discuss more details around the restructured organization.

By now or within the next few moments, each of you will receive an email letting you know what this restructure means to you. Every impacted team member whose role is being eliminated will receive an invitation to a private conversation with a member of our People team.

There was no best option for how to communicate to everyone today. If I could talk to each one of you, I would. I chose to give everybody clarity in as quick a time period as possible rather than forcing people to wait for news. I realize an email is not ideal and in the end I decided that was better than potentially waiting hours to learn about the state of your role.

As I mentioned on the call this morning, impacted team members will have email for the rest of the day. Every person departing will be offered a severance package.

There is no doubt that today’s action is the result of my decisions over the past several years. I take full responsibility for those and am accountable for why we are here today. I misjudged the impact that the macro-economic climate would have on our business and allowed us to continue to grow our headcount too quickly. I’m so sorry that we have to part ways with so many incredible, talented people.

How did we get here? As I’ve said in recent All Hands meetings and weekly updates, we must shift to profitable growth. Going into H2, we worked to control our spending as best we could, but we now need to take more significant action. We, also, need to rethink our overall structure as we are now maturing into a global business.

In H2, our revenue grew less than our operating plan forecasted, while our expense base continued to rise. The actions that we are taking today create a more sustainable cost structure and an acknowledgement that the macro-economic climate will slow down our growth. We have a healthy cash position, but without these actions and a slower investment plan for FY23, we would put ourselves in a disadvantaged financial position. Now, with these actions, we are giving the company more than enough runway needed to get to a sustainable, profitable state.

There’s no sugar coating what we’ve had to do today. This is hard. Where the world is today is hard. This impacts people’s lives dramatically and we are saying goodbye to not only colleagues, but friends. Whether we are working together or not, we can still support, care, and root for each other. Please know that I’m available to help and I’ve spoken with all of our investors and they are happy to help connect folks with their portfolio companies where possible.

Our entire team’s priority today should be helping and supporting our colleagues that are losing their jobs. Let’s focus on that to make sure that we can help make that transition as best we can.

This restructuring is important so we can navigate the current economic uncertainty, meet our future needs by maturing the business, and get on a path to profitability so we continue to be a stable partner for our customers, partners, and employees. I know this is extremely hard for everyone, especially for our colleagues who have had their positions eliminated. The impacted team members need and deserve our support. We ask everyone in our company and our ecosystem to please be ready to help however you can.

A fair question to ask is, “how did we get here?”

Our business took off rapidly when small-to-medium-sized enterprises (SMEs) shifted almost overnight to supporting their teams with remote and hybrid work. This shift proved the value of a modern open directory platform in a world where Microsoft’s legacy AD simply wouldn’t work for the range of devices, operating systems, and mobile work styles that emerged. As the benefits of using JumpCloud spread, our growth went into hyperdrive, and we kept up with rapid hiring to meet customers’ needs and extend our platform into new, exciting areas to deliver even more value. We modeled our business on this pattern of high growth–landing business and expanding it.

Economic challenges around the world – from inflation to rising interest rates – have changed global business dynamics. Those are now impacting us, as well. Our new account acquisition is healthy, and the expansion of our platform and product offerings has created new revenue opportunities for us. But our SME customers aren’t growing as quickly as they were. This forces us to change our business and financial model for sustained growth. And, it has forced me and the JumpCloud executive team to look critically at the investments we need to make to achieve profitable growth.

In addition to the impacts of the macro economy over the past two years, we’ve also experienced incredible international growth. JumpCloud has always had a very healthy international business, and our customer and partner base now numbers in the thousands in both EMEA and APJ. In order to meet the needs of that opportunity, we must invest more in supporting those regions. This includes how we staff and operate the company. Today’s restructuring will enable us to mature our operations to better support those markets. 

While today’s actions are tough, they are happening so that we can continue to solve one of the most foundational security issues facing IT today: identity transformation. JumpCloud’s open directory platform provides an independent identity layer that empowers a single identity to securely connect to all their IT resources, regardless of where that identity originates, or how it authenticates. By unifying disparate access and authentication functionality from password management to SSO to passwordless to multi-factor into an open directory platform, we modernize IT while making it more manageable, secure, and cost effective. This is our vision: Make Work Happen®.

JumpCloud has become a great company because of the people who believe in that vision. We will continue to build and innovate on modern, more secure, and cost-effective IT solutions. Today is hard, but we believe these actions put JumpCloud in a much better position to navigate the current economic uncertainty, while continuing to deliver more value for our customers.

The rest of this week is about helping our impacted teammates. In the coming weeks, we will operationalize the restructure so we can all move forward.


Rajat Bhargava

Rajat Bhargava is an entrepreneur, investor, author, and CEO and co-founder of JumpCloud. An MIT graduate with over two decades of high-tech experience, Rajat is a ten-time entrepreneur with six exits including two IPOs and four trade sales.

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