Company struggles with outbound sales and social media products.
GoDaddy’s (NYSE: GDDY) revenue is topping expectations, but the company is laying off employees and restructuring its business because Covid-19 is impacting part of its business.
The company expects Q2 revenue to top its previous $790 million guidance by approximately 1%.
The restructuring is due to significant challenges with outbound sales efforts and its GoDaddy Social product, which is facing severe headwinds as its customers remain closed or in crisis mode.
814 employees — about 10% of its workforce — will be impacted, but many of them will be offered new roles.
The biggest impact will be in Austin, where the company plans to close both offices. GoDaddy entered the city with its acquisition of Main Street Hub, a do-it-for-me social service. The Main Street product is a higher ticket item than GoDaddy’s self-service tools. GoDaddy makes social media posts on behalf of companies. Many of those small businesses are now closed or significantly cutting back expenses.
331 sales employees in GoDaddy social will be let go. Additionally, the company is reducing the size of its Social Fulfillment and Customer Success teams by 120 team members.
GoDaddy is also shifting its sales efforts to a single office in Gilbert, Arizona. This will impact 134 salespeople in Iowa, who will be offered relocation to Arizona. Some will be offered the opportunity to move into inbound sales in Iowa.
The company is offering a generous exit package to those leaving the company. They will no longer work effective today but will be paid through September 1. They will then get at least four weeks of severance, and people who have worked at GoDaddy for three years or more will get additional severance. GoDaddy will pay healthcare costs through the end of the year for the impacted employees.
GoDaddy is taking a $15 million pre-tax restructuring charge for the payment of severance and related benefit costs and has determined that certain lease assets with a book value of approximately $58 million are impaired.
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