Melbourne tech company Envato is laying off 100 staff
The Melbourne tech company blamed inflation, the invasion of Ukraine and growing competition for the layoffs, despite record operating profits.
An Australian company that made $228.5 million in revenue last financial year has laid off 100 employees.
Melbourne-based Envato, which runs a marketplace that provides access to items such as stock photos, graphic design templates, audio and fonts, blamed economic factors such as inflation and the invasion of Ukraine by Russia, as well as increasing competition in the sector.
Although the company is valued at over a billion dollars by the Australian Financial Review Envato CEO Rich List, Hichame Assi, said the layoffs were part of a need to update its “purpose” and core products after 16 years of operation.
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He said Envato, which saw a 76% increase in operating profit to a record $36.5 million in fiscal year 2020/21, needed to invest in more complex products to as things like stock images become more and more available.
“Roles impacted are company-wide and not focused in any one area, and affect all of our locations: Australia, New Zealand, Mexico and the United States. This is a global change in our focus and our product approach,” he told news.com.au.
“We started making changes last week and meetings with impact roles continue through the end of this week.”
Envato employed 700 people before the layoffs and its Melbourne office has a basketball court and a pool table, piano and a Space Invaders table in its dining room.
Mr. Assi highlighted the impact of the invasion of Ukraine on creatines with a significant number of its authors based in Russia or Ukraine, from WordPress developers to video producers and everything in between.
“The war has clearly had an impact on our creative community given the number of creatives who live in the area, however, it’s not the only factor in this decision; we have to take into account the rapidly changing market conditions affecting our sectors,” he added.
“We were too spread out on all the products we had established. Although they are all Creative products, some are older with legacy platforms. »
Employees affected by the layoffs are being offered 12 weeks’ pay, they can keep their company laptops and Envato’s recruitment team is helping them write their CVs and find new positions, according to Mr Assi.
Envato isn’t the only Australian company to be laid off this year.
5B Solar, an Australian company specializing in solar power projects, laid off 25% of its workforce two weeks ago.
He blamed disruptions to the supply chain and logistics caused by the pandemic, as well as shortages of materials and a spike in prices partly caused by the invasion of Ukraine.
The company had just completed a capital raise launched in August last year, which would inject $30 million into the business. It also plans to raise an additional $20 million.
Last month, buy now, pay later provider BizPay, which has offices in Sydney, was another company to make a hefty round of cuts.
It laid off 30% of its workforce blaming market conditions, but the company was trying to raise $25 million in funding and had partially completed it.