This morning, Kagan sent this message to Gorillas employees following a global Some Hands meeting.
There are some days that people never forget in their lives. Unfortunately, today is one of those days for Gorillas and for me. When things impact our people, it’s emotional and challenging to find the right things to say. Today I announced a reduction in our global workforce and I would like to explain why and how we are taking this decision and how we will support our impacted crew members.
Why & how are we taking this decision
We are currently experiencing a unique wealth and money transfer in the capital markets that changes the world economy. Over the course of the last 24 months trillions of dollars have been injected into the economy, which created a tremendous growth wave for the world. Everyone was a winner, everyone had access to capital and all companies had high valuations. This was also favorable for Gorillas.
Two months ago in March, the markets turned upside down, and since then the situation has continued to worsen. Very rapidly, greed in the markets was replaced with cautiousness. And tech companies, especially low or negative margin tech companies, are facing a very strong headwind.
The result of this new reality is that wealth and money are being transferred to low risk profitable businesses. This will kick-off a natural selection process in our q-commerce industry.
Nine months ago, we realized what was coming and took steps to adjust our risk profile. We raised a 1bn USD investment round and radically shifted our focus from growth to efficiency. Since then we have placed Gorillas onto a clear path to profitability while growing 3X.
As we follow the markets, three things seem clearer day by day:
- Firstly, the recovery in the markets will take longer than expected.
- Secondly, these challenging times will define the winners in our industry.
- And third is, although Gorillas is in the pole position to win, we need more fundamental changes to strengthen our position.
I’m proud of all of you. Proud of how we navigated through a very dynamic market so far.
In January 2020 there were 30 players in our industry. In January 2021 only 15 remained. In January 2022 you can count 4.
And now the stage of the final 4 begins, where one year from now there will be only 1-2 players remaining.
Gorillas will be this player. And this requires a new plan.
Together with our leadership team, we have developed a plan. The plan that will strengthen Gorillas further and ensure that the legacy we have built together grows stronger. With this new plan, we will be much more precise with what we do, and how and where we do it. This will align our priorities to our cost structure.
Going forward, our strategy will focus on the following 3 points:
- We will increase our investments in our core markets: Germany, the Netherlands, the UK, France, and the US - where we make 90% of our revenue and are on a clear path to profitability. For Italy, Spain, Denmark and Belgium, very attractive markets in their own rights, we are looking at all possible strategic options for the Gorillas brand.
- We will sharpen our focus around our customers and brand.
- We will tighten our global headquarters by refocusing our presence to Berlin, to our new office in Germany.
As a result, today, 300 of our teammates will have to leave us. I’m incredibly sad to part ways with our people who have built a one of a kind story. Please know that this decision does not reflect personal performance of the team. I am and always will be grateful for the hard work and contributions of our crew to bring Gorillas to where we are today.
We will do our very best to support our impacted team mates.
I have no words to describe how difficult it was to deliver this news today. Even though it is my duty as a leader to make tough business decisions, it is also my responsibility to care for the ones that make everything we do possible: our crew. We have identified ways to ensure that everyone is supported financially and for their next steps.
If you are one of our impacted crew members, please consider adding your details to our newly created Gorillas Alumni Directory. We’ll share this information with stakeholders from our ecosystem and throughout our networks, and we hope it will help you connect with new opportunities and find your next career step.
It is a time of change
I know this is a lot of news to digest. While it might seem like there are many changes happening at once, it’s important to see the common purpose - positioning and focusing our company for a successful future.
Some final words to our teammates that have to leave us today:
From today onwards, keeping your legacy at its best will be our northstar. I promise to do my personal best for this.
We will continue to build on top of what you have built to ensure you can always be proud of having played a part in this.
I know you might feel frustration above everything else. This same frustration led me to build Gorillas after being impacted myself. I encourage you to be frustrated. To me, to markets, to the company. And then channel this frustration to create your own, new legacy.
You can always reach out to me personally. Once again, I’m incredibly grateful for what you have brought to Gorillas and I’d like to thank each and every one of you.