Last week Evernote laid off 13 percent of its global staff and closed offices in Taiwan, Singapore and Moscow, reports Business Insider. The moves take place just two months after Chris O'Neill joined the Evernote team as CEO. O'Neill was previously an executive for Google Glass.
According to a blog post by O'Neill, the layoff was necessary to focus on Evernote's core strengths: notes, sync and search.
“Achieving that focus means making some difficult decisions. Today we let go of 47 people from the Evernote team and announced the closure of three of our global offices…I believe that a smaller, more focused team today will set us up for growth and expansion tomorrow,” O'Neill wrote.
In addition to these changes, O'Neill said users can look for two more changes in the next several months.
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- The launch of major foundational product improvements around the core features.
- The company will pull back on initiatives that don't support Evernote's mission.
“The health of our business is just as important as the quality of our product. Here our fundamentals are stronger than they've ever been,” said O'Neill. “There are millions of people with premium accounts and more than 20,000 companies working more productively with Evernote Business. Our paid subscription growth is very strong and almost entirely organic; the number of new paid subscribers is 40% higher than this time last year. Making these tough changes from a position of strength puts us on a path to long-term success.”
In a separate story, Business Insider says the once Silicon Valley darling is in deep trouble, laying off 18 percent of its workforce in the last nine months and shutting down three of its 10 global offices this week. As noted above, the company also replaced long-time CEO Phil Libin with O'Neill.
Business Insider says the company has been slow to develop the revenue side of the business, so it is faced with cost cuts across the board. So is Evernote tanking, or is it just going through growing pains, trying to right-size rather than downsize? According to sources quoted by Business Insider, under Libin's leadership, Evernote was not focusing on its core products, instead trying to release shiny new features.
“There was a feeling that we were working on the wrong priorities,” a former employee said to Business Insider. “It was clear the motive was to just continually drum up press. They had no idea how to optimize and improve growth.”
Another criticism of Evernote is that it was not focused on converting free users to paid users. This problem may have prompted additional subscription tiers as we reported in May.
While layoffs and office closures never look good from the outside or feel good from the inside, we imagine they were necessary cost-cutting measures or O'Neill wouldn't have made them. We wonder what other right-sizing measures may be needed, and how exactly the company will refocus its efforts on the company's core products, as O'Neill promised.
We love Evernote and think it has the potential to be a much-loved – and financially profitable – subscription product for years to come, if O'Neill can make the numbers work while continuing to provide subscribers with a product they not only love but depend on as a “must have” productivity tool.