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Founder Guy Pearson admits the company made “incorrect assumptions” about its potential for growth.
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Ignition lays off staff as expansion plans stumble
17 January 2023
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Ignition is laying off around 10 per cent of its staff this week after founder and CEO Guy Pearson admitted “plans don’t always work out the way you intend” and it was critical to “continually adjust, adapt and evolve”.
Sixteen of the software company’s 200 global staff will meet with their team leader to discuss their next steps today before a company meeting at the end of the week about the changes.
Mr Pearson, who co-founded the professional services start-up a decade ago, said in a LinkedIn post that it was the “hardest” day and blamed himself for misjudging the company’s expansion potential.
“We have just let some people go due to incorrect assumptions I/we made as a company,” he said. “However, this is part of the job taken on as a founder, to have to do and make the hard decisions.
“We are saying goodbye to some great people today.”
In the announcement to staff, he said the company needed a “far more balanced approach to growth and efficiency”.
“During the past two years, we have invested in supporting and accelerating growth in all regions. These investments were based on our customer growth assumptions and the associated revenue predictions. While some of our assumptions were realised in 2022, unfortunuately, this was not the case across all regions.”
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“Considering the broader global economic climate, our updated geostrategy and our roles as leaders of the company, we must ensure we align our future growth with sustainable unit economics.”
Just a month ago in early December, Ignition’s year in review boasted of a record year for growth with $3.5 billion in client transactions, 6,000 customers globally and said it was “on track to drive significant growth in 2023 and beyond”.
However, co-founder and chief product office Dane Thomas added a note of caution about the professional services industry:
“It’s been another challenging year across the world, so maintaining cash flow, and optimising revenue will be more important than ever to future-proof your business in 2023.”
Since its beginnings in Sydney, Ignition has expanded to the US, UK, Canada, New Zealand, the Philippines and South Africa. In November 2021, it successfully raised $US50 million to help fund further global ambitions.
Mr Pearson acknowledged it would be a tough period for all staff at the company.
“We know it will be challenging over the next week as we navigate a lot of changes at once … we encourage you to be there for each other.”
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