After pledging not to lay off employees in April, domain registration and web hosting giant GoDaddy is closing down its Austin offices and laying off 331 people on its social media sales team, GoDaddy CEO Aman Bhutani told employees Wednesday morning.
The move is part of a broad restructuring in which the company is consolidating its sales team in Arizona and laying off 814 team members across the company -- some of whom will be offered alternate roles, Bhutani's letter to employees said.
It's a major hit for the Austin team, which was largely built out of GoDaddy's acquisition of Main Street Hub for $125 million in 2018.
"The Social team in Austin has turned over every stone in the last three months to address the seismic shift caused by COVID-19," the letter reads. "While the team made strides in selling our new lower-cost offering, with reduced demand and economics under pressure, we cannot continue to sell these products the way we do today. As a result, 331 team members from the sales team will be departing GoDaddy."
The company is closing both of its Austin facilities, one of which is at 2010 E 6th St. Remaining employees will work from home. Those impacted will work their last day on Sept. 1.
"We’ll be assessing our corporate real estate across all of GoDaddy, knowing we’ll need to use our space differently in a COVID-19 world," the letter said. "With the exception of Austin, no decisions have been made regarding other office locations."
Employees are being offered administrative leave and severance packages, including two weeks of pay for each year of service with a minimum of four weeks paid. It's also providing health care coverage until the end of 2020, with COBRA premiums paid in full.
Back in April, the Scottsdale-based company publicly pledged not to lay off employees for at least 90 days as part of a new campaign to help small businesses keep working through the Covid-19 pandemic.
The April 15 announcement said it signed a corporate pledge committing not to lay off employees for at least 90 days so they “can continue to help customers while feeling safe."
"While those 90 days are not over, I said I would come back to you in June with clarity on the path forward," Bhutani wrote.
In a separate news release Wednesday, GoDaddy said it will face about $15 million in pre-tax costs for severance and related benefit costs, as well as lease assets with a book value of about $58 million.
"... even as our overall business continues to perform well and we are updating our revenue guidance for Q2 as evidence of that, we are still facing challenges in U.S. outbound sales, including GoDaddy Social sales," the letter said. "The outbound sales teams have made many creative efforts over the last three months to reverse the impacts of COVID-19, but the results of these improvements are still far below what we need for the operations to be sustainable."
