Earlier today, Motive CEO Shoaib Makani sent the following note to Motive employees
Today we are announcing the difficult decision to reduce our workforce by 6% and let go of 237 of our team members. Those impacted have been notified via email and will have an opportunity to meet with the People team this week. To our departing Motives — thank you for your contributions to our business and our mission. I am grateful for everything you have done for our customers and our team during your time here.
I know this news may come as a surprise considering our business continues to grow at a high rate and we are on the path to profitability. I want to make sure you all understand how I arrived at this decision and what lies ahead for us.
How we got here
Coming out of Covid, the demand for physical goods and services skyrocketed, leading to an unprecedented surge in new business formation and expansion of existing firms operating in the physical economy. We grew our team from 1,450 to 3,700 people to ensure that we could serve our rapidly expanding customer base and pursue the breadth of opportunity ahead of us.
The result of that investment has been overwhelmingly positive. Our annual recurring revenue has grown more than 3X since the start of 2020. Our Commercial, Mid-Market and Enterprise segments are growing faster than ever. Our addressable market is expanding rapidly as we launch new products and enter new markets.
While the majority of our investment was well placed, it’s now clear that we over-hired in certain areas. Our SMB segment experienced rapid growth over the past two years and we scaled our SMB sales team in line. However recently the market shifted. Fuel prices are up sharply, the cost of capital has increased, and demand is contracting. What were once tailwinds have become headwinds for small businesses. SMB remains an important part of our overall strategy, but our level of investment has to align with the addressable opportunity.
Similarly, our recruiting organization was built for high scale, and will be disproportionately affected since we will hire fewer people next year. We have also eliminated management layers on some teams and specialized roles that we felt were no longer appropriate.
While there is no good way to let people go, our goal is to treat those impacted with respect and to do the best we can to support them. We will be providing severance, accelerated vesting of RSUs, extension of option exercise periods, extended healthcare coverage, and additional benefits depending on location and tenure.
The focus today should be on our teammates who are departing, however, I do want to take a moment to share my thoughts on what lies ahead for Motive and why I’m optimistic about our future.
While the Motive journey has not been a straight line, the common thread that runs through it is our relentless focus on the customer. That obsessive pursuit of customer value which we all share, is the principal reason why Motive is the leader in the race to connect and automate the physical economy. Yet despite the scale at which we operate today, our work is just getting started.
- The vast majority of large enterprises are still using 20-year-old fleet management technology that constrains the safety and productivity of their operations. We are the clear technology leader in this evolving $20B+ market and are on the path to becoming the market share leader.
- Less than 10% of commercial vehicles have an AI dash cam installed to coach drivers and prevent accidents. We have built the world’s most accurate driver safety platform and will capture an outsized share of the remaining market in the coming years as a result.
- Businesses in the physical economy process $100B+ of fleet payments through legacy spend management platforms that are focused on value extraction rather than innovation. By combining payments data and telematics data, the Motive Card is transforming the way businesses manage their spend, and has become a major source of value for our customers.
The opportunity ahead of us is vast, and we are very well-positioned to capture it. Our mission to unlock the potential of the physical economy remains our north star, and our strategy to realize it is largely unchanged.
While today’s news is incredibly difficult, the best way to honor the contributions of those leaving Motive is to continue forward with our mission and to serve our customers and each other the best we possibly can.
Thank you to everyone who has contributed to the Motive journey. This company would not be what it is today without your efforts.