Moving forward, missing friends

As part of a significant restructuring of our organization, we’ve eliminated 24 positions today. There’s no way, nor would we want to, sugarcoat or gloss over that fact or try to make it seem like less of a big deal than it is. As a business owner, at least for me, the worst possible decision I ever have to make is to cut people’s jobs – I hate it. We made hard choices about admirable people who’ve made lasting marks on our company, and people who perhaps leave a piece of our culture better than they found it. All of them deserve our due respect, befitting of Nerdery Nerds and alumni. Today’s moves were made to get to a more profitable ratio of billable to non-billable staff through reductions and reorganization.

Even though we’re a privately-owned company, we believe in being publicly transparent in both good and tough times. This afternoon I talked to our staff about where we’re at, and what’s next. We’ll still grow this year, but intend to do so at a more manageable pace – our current targets call for adding 77 staff between now and the end of the year versus 222 in 2012. To be clear, we’ll have no hiring freeze. We aren’t losing money, but running a thin margin means not saving up for a rainy day and a potential inability to handle bumps in the road. But most importantly, it made us risk averse, and we can’t afford to miss opportunities we should be taking advantage of.

Our recently slumping profitability had much to do with today’s changes. Wherever we could, rather than eliminating positions, we’ve done our best to transition non-billable positions into revenue-generating roles, and looked for ways to make doers of managers wherever possible. Principal Software Engineers – among our most senior developers – will still mentor other developers but will get back to directly contributing to our clients’ projects, for example. Just seven of today’s layoffs are developers, the only revenue-generating department being reduced. All in all, changes were made today in Development, Nerd Experience (a.k.a. HR), Nerd Support (no equivalent in layman’s terms), Sales, and Strategic Information Systems – a reduction of about 5% of our workforce.

Our rapid growth has opened a lot of doors for our company. We’ve been able to assemble an amazing team of geniuses and do amazing things for our partners and clients. As much as we’d like move forward forever at a breakneck speed, we recognize that a pace like that is incompatible with our vision to be the best place in the world for nerds to work. That conflict is on me and the rest of our leadership team, so it’s us who must address it head-on, as we have today. Today’s changes give us a solid foundation to pursue an aggressive but manageable growth strategy in 2013.

Published by

Mike Derheim

Mike Derheim

Mike Derheim co-founded his custom software development company in 2003 and The Nerdery has since made Inc. Magazine’s list of 5000 fastest-growing private companies each year since it became eligible. In 2014, Mike co-founded Prime Digital Academy, school for software engineers. Prime has gone on to become part of The White House’s Tech Hire initiative. Mike promoted then-Nerdery President Tom O’Neill to take his place as CEO in 2016 and remains a guiding force as Chair of The Nerdery’s Board.

3 thoughts on “Moving forward, missing friends”

  1. As a member of the software community, I’d like to thank for you the transparency in your dealings. Your message serves as a reminder to us all that software businesses – or rather, families — exists in a space where change is ever-imminent and therefore highlights the need to remain vigilant in our own pursuits of education and skills development.

    It is always difficult to put the needs of the business before its contributors’. Fortunately, those that were let go today carry with them the experience, reputation, and recognition of the Nerdery name, and as such are certain to land on their feet as they continue to build and develop the types of outstanding solutions the Nerdery is known for.

    I’d like to encourage the members that were lost today to let the reputation of the Nerdery precede them wherever they may go. It is a well-respected name that will certainly open many doors for them in the future.

    God bless.

  2. Respect all around for this message. And, as someone who can relate to every word of this post, I appreciate the perspective and realities that people who do not own a business of this size may simply not understand… esp if they’ve been cut. Kudos to the honesty and your continued success.

    – Billy Jurewicz, CEO, space150

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