Gradient MSP Layoffs; 20 Impacted Amid Go-to-Market Model Shift

Layoffs have taken place at Gradient MSP as the company revamps its go-to-market model and readies itself for an economic downturn.

Gradient founder and CEO Colin Knox confirmed to Channel Futures that 20 people are no longer working for the company. The affected positions include channel engagement champions, the vice president of product and engineering, and events managers.

Knox said the layoffs reflect a slight shift in the company’s business model, especially its go-to-market strategy.

“Over 2022, we purposefully invested heavy in conference sponsorships and community engagement. Our intent was to rapidly build brand recognition and reach wide with our freemium platform. Heading into 2023, our investment in conferences is being reduced as we focus our GTM from predominantly engagement to traditional sales,” Knox said.

Gradient MSP’s Colin Knox

Gradient, which provides a vendor integration platform for MSPs and a variety of tools that include data hygiene and billing reconciliation, engaged with almost 12,000 MSPs in 2022 via its sponsorship investment. But Knox said Gradient is focusing on turning partner prospects into platform users, and ultimately driving monetization.

“Gradient remains 100% dedicated to MSPs and the IT channel and will continue to invest in our Synthesize [ecosystem vendor integration} platform to drive the greatest outcomes for MSPs,” Knox told Channel Futures.

Knox, who created Passportal, co-founded Gradient in 2020. The company last fall announced  $10.3 million in Series A funding.

Macroeconomics

The rest of the technology industry has already felt the pressure of a tightening economy. Layoffs are occurring at channel-facing corporations like Oracle, Intel and Microsoft. Many vendors on the agent channel are quietly considering what their sponsorship budgets will look like in 2022.

And while many people are resisting the word “recession,” many business leaders feel it’s necessary to at least plan for one.

“All indications are pointing to a hard-felt, prolonged recession coming and many businesses in the channel are feeling the pressure. Public markets are down, with announcements from Microsoft and others of significant layoffs, with more to come,” Knox said in an emailed statement to Channel Futures. “The best way to position any business for success is to ensure costs are controlled, cash positions are strong, and knowing what your strongest growth avenues are to invest behind.”

Knox said in a public LinkedIn post that Gradient is “stronger than we could’ve hoped.”

Amid the layoffs, Gradient’s partner program is growing. The company reached 250 partners in February and 500 partners in June. Knox in his Monday statement said the number has now exceeded 700. The company also recently signed a Fortune 500 integration partner last week, Knox said.

Knox added that the company’s integration ecosystem is also growing.

“Today we have 12 high-value direct integrations, with 25 more coming by the end of March that will make huge progress towards making billing and alerting pains a thing of the past for MSPs,” he said.

Andrew McKeage, formerly a technology alliance champion at Gradient, is now serving as director of sales for the company.