It has not been a great few months at the productivity and note taking app Evernote. The Redwood City, California based company recently saw many top executives leave the company and reports began circulating that they were in a “death spiral”. Now, adding to the concerns, the company has laid off 54 employees, roughly 15% of their workforce.
The news of the layoffs came in an company all-hands meeting where CEO Chris O’Neill made the announcement. This was followed up by an email, which TechCrunch was able to obtain.
That email shows that the decision was not one taken lightly and is part of a larger reorganization and refocus of efforts within Evernote.
As part of an ongoing evaluation of our business, we’ve decided to make a tough, but necessary decision to set Evernote up for future success. We’ll be saying goodbye to 54 talented and dedicated people, each of whom has contributed to Evernote’s mission. This was an extremely difficult decision and one that we did not take lightly.
As you’ve heard me say during the past few months, I set incredibly aggressive goals for the year. We’ve grown significantly this year, but at the same time we invested too far ahead of that growth.
We must adjust quickly when part of our strategy is not meeting our expectations. Going forward, we’re streamlining certain functions and will continue to make investments to speed up and scale others, like product development and engineering.
That email also gave a good indicator of the company’s financial situation, which isn’t as dire as earlier thoughts.
As I discussed in All-Hands, Evernote grew over 20% in the first half this year and we are in a stable financial position. Our Q3 revenue numbers remain strong and we expect to end the quarter north of $27 million. We have over $30 million in cash on our balance sheet and will exit 2018 generating more cash than we spend.
While $30 million is like the lofty bank accounts of Apple or Google, it is a reasonable amount of cash that shows Evernote is in better financial position than thought earlier this month. More importantly, they are not burning all that cash and making more than they spend. That is critical for long term success as the company continues to reestablish its footing in a highly competitive tech space.