What the UKG layoffs say about resource redeployment in HR tech

A glance at LinkedIn reveals sympathetic colleagues offering support and job connections following an early July announcement that workforce tech firm UKG is reducing its headcount by about 2,100 people, or 14% of its 15,000 employees.

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A recent blog post by Josh Bersin calls this a “growth move that makes sense,” highlighting that the company plans to increase investments in AI, customer success, branding and mid-market business. Bersin describes the layoffs as a redeployment of resources to new strategic areas, saying, “Sometimes you have to get smaller to grow—and that’s the new business lesson of AI.”

According to reporting in the Boston Herald, UKG CEO Chris Todd sent an email to employees stating: “We are announcing a number of organizational changes that will allow us to aggressively focus on critical areas of growth and to provide flexibility to actively invest in important new areas.”

As a company backed by private equity, UKG likely made this decision to maintain high profitability levels and invest in areas with the potential for higher returns, Bersin suggests. “This move will save $250-$350 million, which [UKG] can invest in AI infrastructure, advertising, and SMB sales and marketing,” writes the analyst.

Data from Layoffs.fyi, which tracks all tech start-up layoffs, indicates this is the largest number of layoffs in 2024 for a tech firm that primarily offers HR products. However, other tech companies like Tesla, Dell, Cisco, Xerox and PayPal have surpassed UKG in 2024 layoffs.

Earlier this year, SAP (a business that includes, but isn’t exclusive to, HR tech) announced a company-wide restructuring affecting around 8,000 positions. Impacted roles are expected to be addressed through voluntary leaves and internal reskilling. This aligns with SAP’s strategy to invest in key growth areas while maintaining a stable headcount by the end of 2024.

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HR innovation in action

Skillsoft and Microsoft have launched a new AI skilling program to enhance workforce capabilities in Microsoft AI tools such as Copilot and Azure Open AI. Utilizing Skillsoft’s AI Skill Accelerator, the program provides training in generative AI technologies.

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Phenom has acquired Tydy, a human resources technology firm specializing in preboarding and onboarding experiences. This acquisition, the fifth for Phenom, enhances its Intelligent Talent Experience platform.

Randstad is forming a joint venture by merging its job board business, Monster, with CareerBuilder. This merger unites two recruitment platforms with over 25 years of experience each. The new entity will be led by senior leaders from both companies.

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