Pax8 Layoffs Hit Mostly in North America

Cloud marketplace Pax8 said it has reduced its global workforce by less than 5%, with most of the layoffs coming in North America.

John Trent, Pax8’s senior director of external communications, responded to a query from Channel Futures with a statement confirming the Pax8 layoffs.

“Pax8 recently made the difficult decision to conduct a reduction in workforce,” he said. “This move primarily impacted North America and was less than 5% of our global workforce. Parting with valued teammates is never easy, but these actions will enable us to optimize operations, increase alignment, and position our business for long-term success. We care deeply about our employees and are providing resources to those impacted to support their continued success. We remain laser-focused on creating an exceptional marketplace experience for our partners and vendors and empowering their growth.”

Trent declined to say how many employees were impacted by the Pax8 layoffs. Pax8, based in Greenwood Village, Colorado, claimed 1,600 employees a  year ago.

A Reddit user posted a letter to employees that appeared to come from Pax8 CEO John Street or another executive announcing the layoffs and reasons for them.

“We do not comment on leaked emails,” Trent said of the Reddit post. However, the letter matched some of the details and wording of the official Pax8 layoffs statement.

Related:Recent Tech Layoffs: 2024 Q1 Tracker

Pax8 has raised $332 million VC funding, according to Pitchbook. Its investors include Crowd Venture Capital, Kamet Capita Partners, SoftBank, Avenir Growth Capital, Blue Cloud Ventures, Liberty Global Ventures, Catalyst Investors, and Sageview Capital. Most of its funding came in 2022 when it raised $185 million in a round led by SoftBank Vision Fund 2, taking its valuation at the time to $1.7 billion.

In December of 2022, Pax8 said it surpassed $1.8 billion in annual recurring revenue.

Pax8 Layoffs Follow Years of Rapid Growth

Pax8 claimed it grew from 550 employees in 2029 to 1,600 in May 2003. “Over the past three years, our company’s growth has been nothing short of phenomenal,” Street said in a May 2023 press release.

At the time, PAX had more than 28,000 MSPs.

Pax8 was still in growth mode at the start of 2024. It appointed Andrew King as senior director of ISV sales strategy and Alvaro Robles as director of strategy for EMEA, and promoted Robert Belgrave to COO and Libby McIlanny to chief product officer. At the time, Street said the promotions would strengthen Pax8’s “capabilities to deliver on our ambitious goals.”

The letter on Reddit said that while Pax8 has “enjoyed strong year-over-year revenue growth in the last few years,” it needs to prepare for economic challenges ahead.

“Every company reaches an inflection point at which they need to become profitable, and that time is now for Pax8,” it read.

The Pax8 layoffs came on the same day ConnectWise also confirmed a small layoff, and continues an industry trend in recent months.

IT layoffs in early 2024 have been made by companies including Dell, Cisco, AWS, 8x8, Cloud Software Group, Genesys,  Ingram Micro, Kaseya, Orca Security, Okta Proofpoint, Salesforce, SAP, Veeam, Xerox and Zoom.