Appfolio Layoffs – It’s difficult to go a day without hearing news about a big firm cutting jobs. Everyone affected by layoffs suffers. But none more so than the employees who took on the burden of their employers’ overhiring and undersaving during the economic boom. Some of the most well-known unicorns of today were started at that time by freshly laid-off workers, primarily from the software industry. This includes the cloud-based property management software provider AppFolio.
The most recent Central Coast-based technology company to reduce staff is AppFolio. In a letter to staff members dated August 17, AppFolio CEO Shane Trigg revealed that the company would be letting go of 149 people. It is 9% of its workforce. Let us explore more about AppFolio’s layoffs in this article.
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About the company
AppFolio provides vertical market-specific software-as-a-service (SaaS) applications. Jon Walker and Klaus Schauser founded AppFolio together in 2006. Expertcity was the first company formed by Schauser. AppFolio focuses mainly on cloud-based property management software, services, and data analytics. The corporate office is located in Goleta, California, close to Santa Barbara.
Thus, AppFolio, Inc. is a real estate-focused cloud-based technology platform. Their products help clients handle crucial company processes, create a better customer experience, and transform their enterprises digitally.
MyCase, a “provider of legal practice management software,” was bought by AppFolio in November 2012. In April 2015, AppFolio acquired RentLinx, a provider of real estate software.
AppFolio revealed the details of its initial public offering (IPO) in May 2015. AppFolio announced the purchase of the utility analytics software WegoWise in September 2018. AppFolio purchased Dynasty Marketplace, Inc. in January 2019 for $60 million.
MyCase will be sold by AppFolio to the private equity company Apax Funds in September 2020 for about $193 million.
On Fortune’s list of the most rapidly developing companies in 2020, AppFolio came in first place. The same year, Glassdoor named AppFolio the best place for workers. In 2022, AppFolio had 1,785 total employees, an 11.56% increase from 2021.
The CEO of AppFolio, Inc., has changed
The Board of Directors has chosen Shane Trigg to serve as President and Chief Executive Officer. This is according to an announcement from AppFolio, Inc. Trigg formerly held the positions of president and general manager of real estate at AppFolio. Jason Randall has been the firm’s president and chief executive officer since 2017. Now, he will act as a transition advisor.
Trigg is an established SaaS executive. He has more than 25 years of expertise driving growth at prosperous software companies like Salesforce and Intuit. He joined AppFolio in April 2020 as the General Manager of Real Estate for the company’s property management services and products. In February 2023, he was appointed President of Real Estate.
Trigg has helped drive AppFolio’s quick advancement toward its goal ever since his arrival. This was to install a go-to-market strategy and a unique product vision to alter the real estate sector. It motivates users to select AppFolio, grow with it, and establish and manage high-performing teams.
Additionally, the board of directors of AppFolio underwent modifications. Trigg will fill Randall’s prior board position. Klaus Schauser, a co-founder of AppFolio and a former chief strategy officer, will switch from being a board director to a board observer.
Olivia Nottebohm is a 20-year veteran of online software companies and the former chief operating officer of Dropbox. He will take over his vacant position. These modifications, which went into effect right away, happened in March 2023.
AppFolio fired 62 employees
According to a WARN Act declaration made with the state on May 1, 2023, AppFolio is the most recent Central Coast-based technology company to reduce its workforce. The company indicated it would be firing 62 employees.
The state’s WARN Act is also known as the Worker Adjustment and Retraining Notification Act. It mandates that companies file a notice when cutting more than 50 workers in California or closing down a whole site.
AppFolio submitted the WARN Act to the state on May 1. It was approved on May 17. By the end of July 2023, the company is scheduled to lay off 62 of its employees, according to the filing.
The Business Times obtained a copy of the firm’s WARN Act on May 23. It was discovered that 59 of the 62 employees being let go were not located in California. In addition, 53 of the laid-off workers were classified as operators, and nine were senior operators.
AppFolio said that as of December 31, it had 1,785 employees in its most recent 10-K disclosure to the U.S. Securities and Exchange Commission. As a result, fewer than 1% of the company’s overall workforce was affected by this round of job layoffs.
AppFolio has recently talked in press releases and earnings statements about how much more capable its artificial intelligence systems are getting. This may be the cause of staff reductions. Yet, AppFolio denied the Business Times request for a response.
According to a press release, on February 2, the business unveiled its AppFolio Alpha platform. It is an AI-powered investment management solution. This was created to offer an all-in-one experience that automatically organizes, normalizes, and visualizes vital property management data.
AppFolio continued to broaden its reach in 2022. It added important features to several of its cloud-based management products. It includes a substitute for a security deposit.
The CEO of AppFolio, Shane Trigg, stated on April 27 during the firm’s most recent earnings call:
“We invested in A.I. early, and in recent quarters, we have told you about our progress with products. They are smart maintenance, bank feed, and our A.I. leasing assistant, Lisa. Lisa has just received a patent for its powerful technology. It was created to improve the leasing process by matching tenants with available units.”
Many I.T. businesses are placing a high priority on advances in artificial intelligence. The World Economic Forum predicts that by 2025, 85 million jobs will be replaced by this technology.
In fact, as stated by Steve Sereboff, an I.P. attorney with SoCal I.P. Law Group, tech businesses are now nearly required to include some form of A.I. component.
Sereboff stated, “One of the facts I am aware of is that there is a lot of pressure on C-suites to adopt A.I. I have this friend who heads a local business group who told me, ‘If a business doesn’t have an A.I. strategy, there’s something incorrect.”
However, practically every technological company in the U.S. is reducing its employment by a small percentage. It is a pattern that has continued steadily since last year. So, it’s possible that the economic unrest is to blame for the layoffs.
Even e-commerce websites like Shopify recently reduced employment by 20%. Also, businesses like Lyft and Dropbox reduced more than 10% of their employees in April.
AppFolio beats expectations
When new CEO Shane Trigg revealed increased non-GAAP net income and revenue for the second quarter on July 27, AppFolio scored a strong earnings beat.
AppFolio saw revenue rise to $147.1 million in the second quarter of 2023. It is up from $117.4 million in the same period in 2022, a 25% increase.
AppFolio did experience a loss of $18.9 million for the quarter that ended on June 30. But once one-time losses are taken into account, its net profit rises to $9.4 million, or 24 cents per share, from $1.2 million in the same quarter a year ago.
With those two marks, AppFolio beat analysts’ expectations of revenue worth $143.7 million and non-GAAP earnings per share worth 13 cents.
Additionally, total units on the AppFolio Property Manager platform increased to approximately 7.7 million in the second quarter of 2023. It was approximately 6.8 million at the end of the second quarter of 2022.
“AppFolio’s second quarter results reflect a focus on our customer-centric strategy and increased operational efficiency,” Trigg said in a press release. “Aligning the value we provide with the value we receive is what unlocks our industry-leading innovation. We’re focusing on providing more and more value to our clients and their communities through AI-powered solutions like AppFolio Realm. It is our entry into the affordable housing market. It is the inclusion of more AppFolio Stack partners and the growth of our payments platform,” he added.
At the conclusion of the quarter, AppFolio had $164 million in cash and cash equivalents.
AppFolio’s second round of 2023 layoffs
In a letter to staff members dated August 17, AppFolio CEO Shane Trigg revealed that the company would be letting go of 149 people or 9% of its workforce.
According to the letter, the business’s lack of profitability limited “our ability to reach our potential.” It had been filed with the U.S. Securities and Exchange Commission.
“We have to make enough revenue for long-term growth and reinvest in our services, technology, and people,” Trigg wrote in the letter. “To continue offering industry-leading technology that allows our consumers to thrive, we must do both.” He continued, “In this context, our costs have climbed greatly, and we have not expanded the business effectively.
This has forced us to make these changes in service to our customers and the long-term health of AppFolio.” This is the second wave of job cuts for Santa Barbara-based AppFolio this year.
Conclusion
The company has made “many efforts to reduce costs this year,” according to Trigg’s message to staff. “But eventually, a reduction in workforce was required to achieve profitability. “While we’ve achieved real progress, these steps are not enough to get us to where we want to be,” he declared.
On August 17, AppFolio shares ended the day up 1.6% at $166.99. Also, shares did not change hands in after-hours trading. Compared to major indices, the stock has increased by 56% since the year’s beginning.
