OpenText Layoffs: Strategic Moves Amidst ‘OpenText 3.0
Why is the reason for OpenText layoffs?
Kitchener-Waterloo’s OpenText, a provider of information-management solutions for businesses, is set to lay off 1,200 employees as part of a “business optimization plan.” CEO Mark Barrenechea revealed these layoffs in a Wednesday blog post, coinciding with the launch of “OpenText 3.0,” a three-year strategic initiative aimed at realigning the company’s business focus.
The blog post outlines OpenText’s intention to reinvest the savings from these layoffs into 800 new positions in the company’s sales, professional services, and engineering departments. However, it remains unclear which specific segments will experience the layoffs.
How does the Business Optimization Plan support OpenText 3.0?
To support OpenText 3.0, the company has announced a Business Optimization Plan centered on placing the right talent in the right locations, funding growth and innovation, and achieving higher productivity at a lower cost with expanded margins. The layoffs are expected to cost around $60 million but will reduce annual expenses by $150 million.
How has OpenText evolved over the years?
Barrenechea reflected on the company’s evolution, describing the first decade as OpenText 1.0, which focused on on-premises content management, and the second decade as OpenText 2.0, emphasizing information management in the hybrid cloud. He described the forthcoming OpenText 3.0 as “information reimagined,” with a focus on cloud, security, and artificial intelligence.
What changes have been made to OpenText’s leadership and debt?
In recent months, OpenText has bolstered its leadership team and reduced its debt. In April, Todd Cione was appointed president of OpenText worldwide sales, while Paul Duggan and Madhu Ranganathan were promoted to chief customer officer and chief financial officer, respectively. Additionally, the company reduced its debt by $2 billion in May following a $2.275 billion divestment of its application modernization and connectivity (AMC) business to Rocket Software. This move followed OpenText’s $5.8 billion acquisition of British SaaS company Micro Focus in January 2023, which resulted in an eight percent staff reduction.
Severance Pay for OpenText Employees in Canada
OpenText employees in Canada who are non-unionized and facing job loss due to downsizing or corporate restructuring are entitled to their full severance pay. This severance package, which can extend up to 24 months of pay, depends on several factors. In Ontario, large-scale layoffs involving 50 or more employees might result in increased severance entitlements. Employees who do not receive their full severance can seek compensation, and it is advisable to consult with legal experts to ensure fair treatment.
At Whitten & Lublin, our team of seasoned employment lawyers is committed to helping individuals navigate their legal options to secure the compensation they deserve. If you have been impacted by recent layoffs in Canada, contact us for a consultation through our online portal or by phone at (416) 640-2667.