Moving forward, missing friends

By Mike Derheim

As part of a significant restructuring of our organization, we’ve eliminated 24 positions today. There’s no way, nor would we want to, sugarcoat or gloss over that fact or try to make it seem like less of a big deal than it is. As a business owner, at least for me, the worst possible decision I ever have to make is to cut people’s jobs – I hate it. We made hard choices about admirable people who’ve made lasting marks on our company, and people who perhaps leave a piece of our culture better than they found it. All of them deserve our due respect, befitting of Nerdery Nerds and alumni. Today’s moves were made to get to a more profitable ratio of billable to non-billable staff through reductions and reorganization.

Even though we’re a privately-owned company, we believe in being publicly transparent in both good and tough times. This afternoon I talked to our staff about where we’re at, and what’s next. We’ll still grow this year, but intend to do so at a more manageable pace – our current targets call for adding 77 staff between now and the end of the year versus 222 in 2012. To be clear, we’ll have no hiring freeze. We aren’t losing money, but running a thin margin means not saving up for a rainy day and a potential inability to handle bumps in the road. But most importantly, it made us risk averse, and we can’t afford to miss opportunities we should be taking advantage of.

Our recently slumping profitability had much to do with today’s changes. Wherever we could, rather than eliminating positions, we’ve done our best to transition non-billable positions into revenue-generating roles, and looked for ways to make doers of managers wherever possible. Principal Software Engineers – among our most senior developers – will still mentor other developers but will get back to directly contributing to our clients’ projects, for example. Just seven of today’s layoffs are developers, the only revenue-generating department being reduced. All in all, changes were made today in Development, Nerd Experience (a.k.a. HR), Nerd Support (no equivalent in layman’s terms), Sales, and Strategic Information Systems – a reduction of about 5% of our workforce.

Our rapid growth has opened a lot of doors for our company. We’ve been able to assemble an amazing team of geniuses and do amazing things for our partners and clients. As much as we’d like move forward forever at a breakneck speed, we recognize that a pace like that is incompatible with our vision to be the best place in the world for nerds to work. That conflict is on me and the rest of our leadership team, so it’s us who must address it head-on, as we have today. Today’s changes give us a solid foundation to pursue an aggressive but manageable growth strategy in 2013.

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Published by Mike Derheim
Chairman, Nerdery Advisory Board

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