UKG, a historic, privately held software company based in Weston, plans to lay off 14% of its estimated 15,000 employees, or about 2,200 people, its chief executive told employees on the eve of the Fourth of July.
“We are announcing several organizational changes that will allow us the flexibility to aggressively focus on key areas of growth and aggressively invest in important new areas,” Chief Executive Officer Chris Todd said in an email early Wednesday. “These changes mean we have made the difficult decision to say goodbye to approximately 14% of our colleagues. Our number one priority in these changes is to treat those who are leaving with compassion, dignity and respect, and to support them to make their transition as smooth as possible.”
“We understand the timing of this news is challenging, coming on the eve of a U.S. holiday,” he added. “We had originally planned to announce this change next week, but as news and speculation about this move has circulated internally, we have decided to bring it forward to today to provide clarity and avoid any uncertainty for employees over the weekend.”
The company has not yet released details about its job-cutting plans but issued a general statement Friday after being asked for more details by the South Florida Sun-Sentinel.
An industry where layoffs are on the rise
Massive layoffs have become a regular feature in the technology industry since 2022 as companies turn to automation and artificial intelligence to execute and innovate. Some of the biggest companies that have let go large numbers of employees include Amazon, Apple, Cisco, Ericsson, Google, Microsoft, Snap, and Tesla. So far this year, 360 companies have laid off more than 104,400 people, according to Layoffs.fi. In 2023, the tracker calculates that 1,191 technology companies will lay off 263,180 employees.
“UKG is making organizational changes to enable us to aggressively focus on key areas of growth and support our long-term strategy,” a spokesperson said in a statement. “While decisions that impact our teams are not taken lightly, these changes allow us to enhance how we support customers while reallocating resources and investing in key areas of product innovation. We are committed to supporting our colleagues through this transition.”
As of early Friday, the company had not filed any layoff notices with the state of Florida under the federal Worker Adjustment and Retraining Notification Act. There was no immediate information available about how many employees the company currently has in South Florida or how many will lose their jobs in the area.
Todd said in an email that the company began notifying affected employees in the U.S. and Canada on Wednesday, “with a goal of completing notification to all regions by early next week.”
He said UKG would follow the “consultation” process required by local laws in other countries where employees would lose their jobs.
Todd said those leaving will receive severance pay, “annual bonuses for 2024 for eligible retirees,” job search assistance, continuation of health insurance for a period of time and access to the company’s employee assistance program.
The power of human resource management
UKG (short for Ultimate Kronos Group) is a multi-billion dollar company owned by private equity firms that provides HR, payroll and workforce management software to businesses, schools and government agencies.
The company was formed more than five years ago with the merger of Ultimate Software, a publicly traded company based in Weston, and Kronos, a Boston-area company that develops and sells workforce management tools to private and public sector companies and institutions. The all-stock transaction was valued at $22 billion.
UKC was once a sponsor of the NBA Miami Heat basketball team, with players’ uniforms sporting a small patch bearing the company’s initials.
After Ultimate Software and Khronos officially merged in February 2020, UKG announced that it had “approximately $3 billion in annual revenue, more than 12,000 employees worldwide, and growth plans that include adding an additional 3,000 employees.”
According to subsequent reports, the company appears to have met or exceeded those goals, with revenue expected to exceed $3.65 billion in 2022 and a hiring threshold of 15,000 people this year across 24 locations in the U.S., Canada, Europe and Australia.
Following the merger, the company will be co-headquartered in Weston and Lowell, Massachusetts, Kronos’ original location in the greater Boston area.
UKG’s controlling shareholder is Hellman & Friedman, a San Francisco-based private equity firm with 40 years of history, with other investors including private equity funds managed by Blackstone, the largest minority shareholder, and the Canada Pension Plan Investment Board.
Hellman & Friedman has not publicly discussed the impending cuts.
