eDiscovery leader Relativity has confirmed that it is phasing out its Relativity Trace communication surveillance business, following the announcement that it is cutting 150 roles in order to prepare for what it describes as “an increasingly uncertain macroeconomic environment.”
Last Wednesday (7 December), Relativity informed staff of its decision to decrease its global team. The company, which received an undisclosed strategic growth investment from Silver Lake in March 2021, valuing it at $3.6bn, told Legal IT Insider in a statement: “On Wednesday, we announced the difficult decision to decrease our global team. This means that approximately 150 talented Relativians will be leaving the company. We’re committed to ensuring everyone is treated fairly and with respect during this transition, and will be offering financial, healthcare, and job search support to impacted Relativians. We want to express our deepest gratitude to our colleagues who will be moving on, and we wish them happiness and success wherever their paths take them next.”
One of the areas in which Relativity is cutting its investment is its communication monitoring software Relativity Trace, with Relativity planning to focus on core legal use cases going forward. The spokesperson said: “To support our core business strategy, we are reducing and realigning our investments in certain parts of the business. This includes phasing out the Relativity Trace business — our AI-powered communication surveillance product — to focus on our core legal use cases. Additionally, we are consolidating select teams and reducing the number of roles across the business to proceed prudently in an uncertain macroeconomic environment, and to support our continued investment in remaining an industry leader well into the future.”
The layoffs coincide with the arrival of new CEO Phil Saunders, previously CEO of cloud-based people development software provider Cornerstone OnDemand, who succeeds Mike Gamson. Saunders joined Cornerstone in May 2020 after its $1.3bn acquisition talent management tech company Saba.
There has been plenty of speculation about the layoffs on social media and discussion channels such as Reddit, with many assuming that pressure has come from Silver Lake to reduce costs after its massive investment last year.
However, one commentator who claims to have been made redundant, said on Reddit: “I was part of the layoffs at Relativity yesterday (10+ years tenure, senior leadership). I believe the layoffs were motivated by a continued push the last 18-24 months to increase efficiency, cut costs, and improve the overall bottom line.
“The new inbound CEO Phil Saunders has a history of helping quickly flip companies ( I think he averages 18 months at his last few companies) so this seems to be part of the road to IPO/Sale.
“From those I’m aware of, many of those laid off were either longer-tenured employees who’s salaries had grown larger than they were willing to continue OR recent new hires (18 months or less) who’s work could potentially be distributed amongst peers to run more lean.
“The company itself has performed as expected the last few years and I wouldn’t look at this as a sign that things are going poorly or the ship is sinking. This is a transformation to make the company more attractive for a sale imo.”
Interesting post, keep it up!