TIER increases focus on profitability – actions and organizational changes
August 23, 2022
By Lawrence Leuschner, CEO and co-founder of TIER Mobility
An open letter from Lawrence Leuschner, CEO and co-founder of TIER Mobility:
First and foremost I would like to thank all of you for your continued support and to express my heartfelt gratitude to all of our amazing colleagues whose hard work and creativity has built TIER over the last 4 years - I am extremely proud of what we have achieved. It makes today's announcement one of the most difficult in my career.
Just under three months ago, we first spoke to you about the need to accelerate our response to the current downturn in the economic and funding climate. We conducted a thorough review of the business and took a number of tough decisions to reduce costs and focus on projects that will positively contribute to our path to profitability.
Unfortunately, a combination of the enormous external challenges the tech sector currently faces and the tightening of the funding market means that we have come to the difficult conclusion that we must make more fundamental changes to the business in order to secure the long-term future of the company. As a result, and with a very heavy heart, I have to confirm that we are reducing the size of the TIER workforce.
This was not an easy decision. We pride ourselves on pursuing our mission together and on retaining and supporting the excellent talent we have at TIER, and so losing so many valued and committed colleagues is – I know - going to be painful for us all.
Specifically, what does this mean for the business?
Approximately 180 colleagues will be leaving the business - around 16%. This directly reflects the decision to focus on fewer projects to get TIER on a sounder financial footing so we can continue on our mission to Change Mobility for Good. In the vast majority of cases, colleagues who will be leaving the business were informed by team leaders in 1-2-1 meetings this morning. There are a small number of exceptions to this based on local legal requirements and the need to enter a consultation process.
What is the renewed focus?
We have moved away from the strong focus we had on rapid growth and geographic expansion that defined the first few years of the business, and towards ensuring an increased return on investment for our current footprint. We have also taken the decision to stop or pause specific projects and work streams that can't currently demonstrate a clear path to profitability, and we have shared these decisions with you as they have been made.
These decisions are not a reflection of the work of these teams, and it does not mean that everyone in these teams will be leaving us. While certain teams will experience a higher proportion of redundancies than others, all organisational units in the business have been affected.
How did we approach the headcount reduction decisions?
We are a global company, employing people in over 20 countries, each with their own legal process that we must follow. While this means there will be some variation in timeline and exact process, there were a number of principles the global leadership team defined to guide the process:
Decisions to reduce and restructure teams should be driven by the need to support our strategy to achieve profitability in 2023.
We must preserve our commitment to fairness.
Our people are our priority. Therefore, where we have to say goodbye to valued colleagues and friends, we want to support them as much as possible during this difficult time.
With these in mind, the c-level worked with leadership throughout the business to conduct a full audit of every team, agreeing on a future state in terms of size and structure to support our strategy. This included identifying where roles might need to be made redundant.
The result of these discussions is that we will very sadly be losing some wonderful colleagues who have made a significant contribution to TIER's journey and growth. It is incredibly important to me that we recognise in this and other forums the impact they have had on our business, and that we support them as much as possible in what is a hugely difficult time for them. That is why we are offering the following to all leavers:
Severance: Each individual will receive details of severance payments based on geography and tenure.
Equity: We are dropping the one-year cliff on ESOP for everyone hired in the past year. We recognise you have made a strong contribution to TIER and we want you to depart as a shareholder.
Employee support: We are offering a number of resources to support colleagues to find their next role, including partnering with a specialist company called Purple CV who are providing CV, LinkedIn and cover letter re-writing as well as 1-2-1 interview coaching.
Alumni page: In addition, we have created a public facing alumni site to help colleagues find new roles.
Mental health support: we recognise this is going to be a very stressful time. We are therefore offering all colleagues leaving the business 3 months of nilo.health mental health support.
Equipment: All employees can keep their office equipment. Permanent employees will keep their laptops.
What happens next?
At next week's All Hands, I and the rest of the c-level will lay out the strategy for the future. We will make sure you all have ample time to digest this news and raise any additional questions.
A reduction in force is a challenging exercise for any company and particularly difficult for one like TIER where we have forged such close relationships with one another based on our collective drive to Change Mobility for Good. Making these tough decisions for the long-term benefit of the company is without doubt one of the hardest things I have had to do in my career.
I want to take this opportunity to express my deep and sincere gratitude to every single person who has been part of TIER's journey so far. Your passion for our mission has been a source of inspiration and it gives me hope that we can and will help to reduce urban emissions - playing our part to fight climate change.
For everyone whose ride with us is coming to an end, please be in no doubt of your value or your skills. The decisions we have taken are not a reflection on you but instead are a reflection of the extraordinary global economy we currently find ourselves in. Thank you all for everything you have done for TIER and, from the bottom of my heart, I wish you all the very best for your next mission to change the world.