Earlier today, Lattice CEO Jack Altman sent the following note to Lattice employees.
I’m writing to you today to share news about a very difficult change we’re making at Lattice. We’re going to reorganize the company and part ways with around 15% of our teammates. It’s not lost on me that this is particularly hard as an HR software company whose mission is to make work meaningful. If you are one of the impacted Latticians, you’ll receive an email from me in a few minutes sharing more details and letting you know about next steps. I am deeply sorry that you have been impacted as a result of this change. If you are not impacted, you will be receiving a separate email from me letting you know that you were not impacted.
The market reality
Starting in the middle of 2020, the world moved into an unprecedented environment for many companies. As interest rates plummeted to 0% and monetary policy pushed lots of money into the economy, companies had easy access to capital, and demand for products and services surged. Organizations hired aggressively to meet market demand and the war for talent reached a fever pitch. The result, for Lattice, was that growth skyrocketed.
Fast forward a couple of years to 2023, and the economic picture has meaningfully changed. Many companies – our customers and prospective customers – are seeing their demand retract and they are slowing hiring and spending in all areas to preserve their cash and get to profitability.
While our revenue has grown by five times since the start of the pandemic, our costs have grown by even more as we geared up for a continued rate of growth that now looks unlikely. Additionally, so much of our organization was built for a paradigm of rapid growth, in terms of the roles, ratios, and structures we’ve put in place.
My job now is to lead the company through a change in the way we operate, with a far more balanced approach to growth and efficiency, because the market and our customers will demand it. This means that, instead of a world in which Lattice will soon have thousands of employees, we will operate with a relatively flat headcount in FY’24. And instead of a world in which we hire way ahead of organizational needs, we’ll operate efficiently with the resources that are needed for the organization today, which will lead to better products and experiences for our customers. To be clear-eyed, this is simply not the organization we have today.
I have full faith in our long-term strategy; the core problem we’re solving is more important than ever. But while reviewing our FY’24 annual plans it became clear to me that the only path to constructing a healthy business through this downturn requires a reset to our overall headcount. We started to be affected by the downturn in summer 2022, and quickly implemented a hiring freeze but did not reduce headcount. As the downturn has progressed, I don’t see any other way to look you in the eyes and say I am putting the ship first for all Latticians and for our customers without making this change.
We’re lucky to have the financial footing we have, the customer base, the brand, and the team. We offer products that we know the market needs especially in these challenging times when business performance is so critical, and we feel confident in the value of the new products we have coming. This change positions us to have the runway we need to build for the long term and will give us an organizational design that I believe will make us more streamlined and able to accomplish our mission.
As I mentioned at the start of the email, we’re parting ways with around 15% of the company. Here’s what we’re doing to make this layoff as manageable an experience as possible for the talented Latticians who we’re saying goodbye to through no fault of their own:
- Pay: Separation packages offered to affected employees include a minimum of 12 weeks of pay, and more for those with longer tenure.
- Equity: We removed the vesting cliff for employees who were with Lattice for less than one year. Their equity will vest monthly during their employment term as if they had reached the cliff. Employees will have up to 3 years to exercise their options post-exit.
- Healthcare & Mental Wellness: We’re covering the cost of healthcare benefit continuation for employees, as well as extending mental health support through Spring Health, for 3 months.
- Financial Advising: Origin financial wellness support will be available for 3 months to provide Certified Financial Planning and other tools.
- Career support: We will be providing transitional support services to affected employees, with the costs covered by Lattice. The support includes career coaching, resume and LinkedIn updating, interview coaching, among other personalized services.
- Laptops: All impacted Latticians may keep their cleaned laptops (all company data has been removed). We recognize that a career transition is not a good time to be without a capable machine.
- Invest in Your People Fund: The option to have Lattice invest in a new startup will remain available to departing Latticians. If they decide to launch a startup that aligns with Lattice’s investment criteria, they will be eligible for up to a $100K investment from Lattice. Details here.
I am deeply appreciative to all of those who are being impacted by this change. Each person is incredibly talented and made meaningful contributions to Lattice that will not be forgotten. We will do everything in our power to help these folks go on to their next chapters in wonderful ways.
Thinking about the future
Reflecting on what we could have done better, one of the most important takeaways is the importance of building an all-weather business. In response to the exceptional customer demand we experienced in 2021, we grew our headcount quickly. Going forward, it’s critical that Lattice builds with efficiency and financial health more prominently in mind.
In addition to restructuring our team, this is a moment where Lattice will need to return to basics. We’ve been speaking a lot recently about our customers needing to adapt to meet the moment, and Lattice will too. As we scale our business from a venture-backed startup to one that can someday be a profitable, independent business, we’ll change not just our headcount but our way of operating. We’ll talk more about what this means for Lattice over the coming days and weeks.
Today, we thank the shipmates who will be departing. I am so sorry to not have been able to give you a more positive and complete experience of working at Lattice. I am so grateful for you sharing your talents and energies with us for the time you were here.