Denver-based property manager Evolve is laying off 20% of its workforce, Skift has learned.
The company shared the details, and co-founder and CEO Brian Egan’s letter explaining it all to staff, after Skift asked the company for details. The firings covered around 175 employees, the company said.
The layoffs followed job cuts of 14% of staff in May, when the property manager said that supply in the vacation rental market had exceeded demand, and average daily rates, bookings and revenue per property fell below expectations. In that round, Evolve fired 164 employees.
Egan told employees Tuesday that the company determined it would have to scrutinize all its costs, including payroll employees and non-payroll staff so it could transform the company into a very profitable enterprise.
“In May, we were reacting quickly to a precipitous shortfall in Revenue, it was defensive and volume-driven; this decision is the polar opposite, we are acting strategically to unlock value creation and accelerate Durable Growth,” Egan wrote in a Team Update dated September 12. “We are confident in our work to re-underwrite our allocation of all resources, our self-sustaining profitability trajectory, and the ways in which our narrowed focus and rigor will serve to speed us up and protect us against future market volatility. So long as those things remain true, we will not be considering another broad-based reduction of our team.”
Asked about a news tip that the layoffs included a move to offshore customer support, Egan said:
“Workforce augmentation partnerships are not new to Evolve, and we’ve found that owner and guest experiences are improved when we blend partners into the mix — especially during peak season demand, which is a challenge for all hospitality companies and a consistent friction point for travel consumers.
“We see an opportunity to focus our internal team on what they do best — relational interactions to provide the level of hospitality and support our customers have come to expect. When it comes to more transactional interactions, our goal is to continue improving and streamlining our customer experiences by enhancing self-service capabilities, including AI, and scaling our existing workforce augmentation partnerships, which, as I mentioned, enable us to ramp support teams quickly and provide customers with world-class response times regardless of demand levels.”
Here’s the full text of the Team Update:
Evolve Co-Founder and CEO, Brian Egan, shared the following message with our teammates prior to an all company meeting.
September 12, 2023
Four months ago, I introduced three themes that we needed to center on in order to define our path ahead:
- Transform How We Operate
- Innovate From the Outside In
- Amplify Evolver’s Growth
My intention was for these themes to serve as a call to action, essentially as questions to be answered. I didn’t know exactly where they would lead us, but I had conviction that these were the right ideas for us to focus on.
After months of hard work, introspection and feedback, I now have as much conviction about the answers as I originally had about the questions. I’m crystal clear on the company we need to become, what I am calling Evolve 3.0, and the transformation this phase change will require.
I owe it to all of you to start with the hardest part: in order to Transform How We Operate and deliver on our vision of Evolve 3.0, we will be reducing the size of our team by ~20%. I will outline our communication plan below, but I want to start with the Why.
As always, our values matter most in the most difficult times. And, as always, I will do my very best to live up to them, especially COHAD and Care, as I lay out why I made this decision and what you can expect to happen next.
Why I made this decision: our phase change to Evolve 3.0
In order to place this decision in context, I need to briefly summarize the phases of Evolve over the course of our journey.
Evolve 1.0 (Feb 2011 – Aug 2018): We were a scrappy startup working tirelessly to validate our business and earn the opportunity to pursue our mission and vision at scale. While we wore our resourcefulness as a badge of pride, the truth is that a lack of resources acted as an ever-present constraint. It’s easy to stay lean and focused when you have no other choice. Evolve 1.0 ends with us finally hitting our stride, growing our business rapidly and raising a significant round of funding from world-class institutional investors. It was time for us to mature as a company, and that required a phase change.
Evolve 2.0 (Sep 2018 – May 2023): Our objective was to continue growing at a high pace while establishing a foundation that could support the much larger business we planned to become. That challenge was amplified by the pandemic, which first required us to slam on the brakes as we grappled with an existential threat, and then to accelerate as quickly as possible when the combination of forces it unleashed formed a powerful tailwind. We deployed capital rapidly and we were successful in achieving unprecedented growth while strengthening our foundation. That said, while we tried to stay true to our mantra of Durable Growth, in retrospect it’s clear that we lost focus, let the line between investing and spending become blurred, and ultimately left ourselves vulnerable to a sudden market correction. Evolve 2.0 ended with our difficult decision to reduce the size of our team by 14% to address a material market-driven Revenue shortfall. For the second time in our history I knew it was time for a phase change, and I issued the challenge of our three themes.
Evolve 3.0 (May 2023 and beyond): In this phase we will become a disciplined, self-sustaining company. We will Transform How We Operate by ensuring that all of our resources, every dollar and every hour, are tightly aligned with our drivers of value creation and invested (not merely spent) with measurable, high ROIs. We will Innovate From the Outside In by redoubling our efforts to put our customers at the center of everything we do, and increasing the velocity with which we test and learn our way to reducing friction points and elevating experiences. And we will Amplify Evolver’s Growth by committing to absolute clarity on how every role connects to our mission and vision, developing a culture of rigor and focus (while maintaining our empathy and hospitality) and creating the development opportunities that come with being a member of a high-performing team operating in a high-performing company. As a result, we will become a highly profitable business in the very near-term, and increasingly so over time. But I want to emphasize that this is not just about generating profit – it’s about value creation. And while I know that can sound rather “corporate” and soulless, in practice it is anything but. Value creation means ensuring that our Owners are able to fulfill their dreams of owning a vacation property and achieving financial freedom, that our Guests create priceless memories with their friends and family, and that the time our teammates invest at Evolve doubles as the most impactful chapters of their career. This is what it looks like to narrow our focus on the work that we’re all excited to do, it’s why we’re here and what brings meaning to our day-to-day efforts. Nothing could be further from soulless.
The first step of enabling this transformation involved scrutinizing our current allocation of resources – every dollar and every hour, both payroll and non-payroll, all of it. It was this process of re-underwriting that led me to the difficult conclusion that in addition to adding to the millions of dollars in non-payroll savings that we’ve recouped this year, we needed to reduce the size of our team. The hard truth is that while we have a talented, hard-working and passionate team, and the vast majority of our work has a positive impact on our business, not all of our resources are being allocated to the very few things that will most clearly and powerfully move the needle on value creation and elevate the experiences of our Owners, Guests and Evolvers.
Ultimately, I am accountable for everything that happens at Evolve, and that includes the impact that this decision will have on our teammates who will be leaving the company. And, having undertaken the hard work to gain an intellectually honest view of our current operation, I am equally accountable for addressing it. Because as hard as it is to deliver this difficult news to a subset of our team, I know that this is what it takes to best serve the interests of all Evolve stakeholders, to pursue our mission and vision, and to fulfill our potential.
I recognize that some of you will be concerned that we could go through another layoff in the future. Here’s what I want you to know: in May, we were reacting quickly to a precipitous shortfall in Revenue, it was defensive and volume-driven; this decision is the polar opposite, we are acting strategically to unlock value creation and accelerate Durable Growth. We are confident in our work to re-underwrite our allocation of all resources, our self-sustaining profitability trajectory, and the ways in which our narrowed focus and rigor will serve to speed us up and protect us against future market volatility. So long as those things remain true, we will not be considering another broad-based reduction of our team. As always, we will continue to seek out opportunities to improve our business, and seizing those opportunities may require changes to our organization, and, like every company, we can never be fully immune to market forces beyond our control.
What you can expect will happen next: our communication plan
I know that this will be an anxious, concerning time, and we are working to communicate with everyone as quickly as possible. That said, this transformation will affect different areas of our organization in very different ways and for very different reasons, so I want to ensure that we are communicating in context about the specific Why behind our decisions at a team and/or individual level.
The majority of Evolvers directly impacted by this reduction will be informed within the next 24 hours. In certain areas, it may take us until the end of this month to finalize that communication – in those cases we will let you know exactly where things stand and when you can expect to know more. As we communicate with departing Evolvers we will be providing comprehensive information on severance, health benefits and transition resources, and you will all have an opportunity to meet with a leader on your team, as well as a People Business Partner. No matter what, we will live up to COHAD and treat all of our Evolvers, especially those who will be leaving us, with the dignity and respect you all deserve.
That process will start tomorrow morning at 9:30am MT with an All Hands Meeting that I will be leading. While I have covered all of the company-wide context here, I think it’s important that you hear from me directly in a live meeting, not just in written format.
I will be discussing this tomorrow morning, but I would like to take this opportunity to say thank you to all the teammates we will be saying goodbye to. I am beyond grateful for all that you contributed to Evolve during your time here and I am honored to have been your teammate.
For our teammates who are moving forward with Evolve, I know that this will be a difficult time and that this transformation will not be easy. I appreciate your hard work and perseverance. At the right juncture, I’ll be providing more context around our vision for Evolve 3.0 and how we plan to bring it to life. But for now let’s focus on supporting the teammates who will be leaving us, our customers and each other.