Last week with my Co-founder, Tim, I took the tough decision to reduce the size of our team by 12%, to ensure the strength of the business through an economic downturn.
We are losing amazing people through this, not because of anything they’ve done but because of decisions made under my leadership. As CEO, I’m accountable for the steps that have taken us to this point and the actions which follow.
As an organisation, we believe deeply in transparency and its ability to allow people to make informed decisions. Internally we’ve spoken as a team, but what’s written here is for anyone with a vested interest in Permutive and our success—whether you’re a customer, an employee, a partner, a shareholder, or just a supportive bystander.
I want to take the opportunity to reflect on what’s changed, the steps we’ve taken, and what we intend to do to ensure Permutive achieves its mission to rebuild advertising to protect privacy but doing so through responsible growth.
What has changed, and why does it impact Permutive
At the start of June, Permutive paused hiring due to concerns around the broader economy and its impact on advertising and the venture capital ecosystem. Over the past month, we’ve built a clear picture of how this impacts Permutive.
- We are heading into a prolonged economic downturn with a disproportionate impact on the technology sector: With rising inflation and heightening supply chain shortages, consumer demand across the entire economy has reduced. Hikes in interest rates have rippled into the markets and led to a material drop in public and private tech companies’ valuations (in some cases by as much as 80%).
- Access to venture capital has contracted: Venture capital is the lifeblood of innovative and high-growth potential companies like Permutive. Over the last two years, cash has been readily available. But as the economic conditions changed, we noticed a hard reset on venture capital and a strong contraction in the ability of growth-stage companies to readily access the markets for funding.
- Advertising spend is harder to forecast: Big tech companies like Google and Facebook started freezing hiring in response to slowing ad-spend, which was a leading indicator that forecasting where advertisers spend would get measurably harder and unpredictable in the coming months.
How did we make decisions on who’s impacted
Our mission remains the same, but our path there will change. We will achieve our mission through responsible growth, and this was the guiding principle when making the difficult decisions around which roles we need as a company. Going forward, ensuring responsible growth at Permutive means hiring in line with revenue and the value we create for customers.
For every role at the company, we modelled a ratio that would inform how many people we would need to grow towards a profitable model. We made redundancies where we had over-hired, with varying levels of reductions by teams and departments. Some teams were more heavily affected than others—that was not a reflection of their importance or contribution to the company, but rather a case of having over-hired ahead of revenue.
As a company, we focused on how we can best support our people through this: a minimum severance of 10 weeks (notice period, plus 2 months, plus a further 2 weeks for each year of service), 3 months of COBRA and access to our mental health support, and the focus of our Talent team on helping them find new roles over the next 6 weeks (please email here if you have open roles).
What happens next?
This isn’t the first time we’ve been here. In the period entering COVID, we went through similar changes, and emerged having quadrupled the revenue of our customers through our infrastructure, doubled our revenue as a company, and hired back people we parted ways with.
We believe deep customer empathy sits at the heart of a successful company. Through these changes, we’ve solidified our business around our customers, and we’ll talk more about how we’ve re-organised internally to drive deeper customer alignment and empathy in our blog over the coming weeks.
Entering COVID, we understood how to grow the business responsibly, but we lost sight of that as capital became easy to raise. Please know that the decisions made last week were to ensure the company has stability and a strong path towards profitability, with the capital we’ve raised.
We’re losing exceptional people. To each of you, you’ve each shaped Permutive in your own unique way, you’ve believed in and carried us towards our mission, and we want to say a huge thank you on behalf of everyone at the company.