Five9 Layoffs

Cloud contact center software company Five9 cut 123 employees, 4% of its global workforce, starting April 3, 2025, marking its second significant layoff round in under a year. The company's board approved the reduction on March 31, describing it as a step to "align the business with strategic priorities" and redirect investment toward artificial intelligence. Five9 had already trimmed 7% of staff in August 2024, and the back-to-back rounds reflected mounting pressure from activist investors Anson Funds and Legion Partners, the former of which secured a board seat in December 2024. The company estimated total cash costs of $7 million to $9 million, covering severance, notice period payments, and benefits. The cuts landed even as Five9 reported 17% year-over-year revenue growth, while its stock had fallen roughly 60% year-to-date. Execution was expected to wrap up by the end of Q2 2025.

Reason: Strategic reprioritization toward AI, activist investor pressure

Source: marketwatch.com

Five9 said in August 2024 it would cut approximately 190 employees, 7% of its roughly 2,684-person workforce, after weaker-than-expected bookings forced the cloud contact center company to lower its full-year revenue guidance by 3.8% to $1 billion. CEO Mike Burkland described it as "the very difficult decision to say painful goodbyes to some of our team members," framing the cuts as part of "broader efforts to drive balanced, profitable growth." Disappointing new logo bookings in late June and broader economic headwinds were cited as the trigger. Five9 estimated it would incur $12 to $15 million in severance, notice payments, and related expenses, most of it in Q3 and Q4 2024. Analysts at KeyBanc projected the move would generate roughly $35 million in annual run-rate savings. Shares fell about 0.5% after-hours following the announcement.

Reason: Weak bookings and reduced revenue guidance; cost reduction for profitable growth

Source: crn.com