What the Coupa Layoffs tell us about the State of Procurement Technology

The layoffs that have happened at Coupa should not be a surprise. We’re not clear on numbers, but I’ve seen the 30% figure, which is probably 900-1100 employees losing their job.

Big numbers.

Thomas Bravo acquired them to their ever-growing portfolio of big tech. A company with over $2bn in debt likely had issues other big tech have been displaying.

Too many people.

We all saw earlier in the year when Elon Musk bought Twitter how he cut the workforce by approximately 80% and closed down one of its datacentres.

Twitter was losing $4 million a day - I’m not saying Coupa was losing the same, but it’s likely that no matter how much they were bringing in, they were always eating away at that.

Charles Goodman, Interim CEO of Coupa stated in his announcement email to employees, “that includes greater alignment across business objectives, reducing duplication of effort, examining our real-estate footprint, and going forward with a smaller workforce”.

What strikes me here is a few things:

1- Great alignment needed

2 - reducing duplication of effort

3 - real estate footprint

It strikes me as funny, in a slightly sadistic but largely ironic way that a Procurement Tech company needs to ensure it’s properly aligned internally.

With bloat in employees, the rise of internal politics, and no doubt brinkmanship on projects, the need to go leaner than before sounds like a smart move.

Jeff Bezos has a rule, the two-pizza team rule.

The rule is in place to ensure that teams are kept small, that two pizzas should feed a team comfortably, and that smaller teams are faster, more agile, and can collaborate better for better results.

We’re probably seeing the impact of a company whose structure isn’t right for the huge shockwave the tech space has felt in 2023.

With larger teams or too many people, it’s almost impossible to know who is working on what and to prevent duplication.

Call me a sadist, but I’d rather have a smaller team of people, where we cannot quite get to everything we want to do.

Why?

Because we all know what is currently being worked on, we have to ruthlessly prioritise, and we never take on bloat.

I wrote about this in my recent article.

Real Estate is an area Procurement Pros should be well aware of and actively working on.

For any of you that cover this area, you’ll know how ridiculously priced office space can be, especially in the big cities.

The post-pandemic era of remote and hybrid working has put a spanner in the works for big office spaces. They aren’t wanted by employees who want a mix or a focus on remote working. If you cannot get workers into the office, they are a drain on resources.

So nothing with this announcement was a surprise.

I’m not waiting from the sidelines to see how this impacts customer relationships.

Layoffs in the Procurement Tech space have been happening throughout 2023.

You may have missed them though.

In short, the Procurement Tech space exists in a macro economic climate where procurement technology isn’t viewed as mission-critical. This, we know, is a false position.

But it’s the real position.

We will see more layoffs, consolidation, and perhaps reduced service from providers throughout 2023 and in to 2024.