Evolve announces 14 per cent workforce reduction
US: Denver-based vacation rental management company Evolve is reducing the size of its team by 164 employees [14 per cent of the company], despite raising $100 million in growth funding just over a year ago.
In an update shared with Evolve employees last Wednesday [17 May], co-founder and CEO, Brian Egan said that the company was operating in a market that has become “increasingly dynamic and volatile”, with supply growth outpacing demand growth and subsequently leading to average daily rates [ADRs], bookings and revenue per property “coming in below our expectations”.
Although Egan conceded that the firm was in a “strong” position, with bookings and revenue per property coming in above pre-pandemic levels, he said that the “difficult” decision had been made to ensure Evolve remains committed to its “longstanding ethos of durable growth”.
Emails sent to departing team members were said to have included comprehensive information on severance, health benefits and transition resources, as well as additional outreaches from team leaders and the option to schedule one-to-one meetings with a people business partner.
While it was not made clear which departments would be most affected by the layoffs, the majority of former Evolve staff members who posted on social media appear to have worked in customer service roles.
Promising to “communicate often, honestly and directly”, Egan said that the communication plan had been designed to limit the amount of time that employees would be feeling anxious about the future of their roles, adding that Evolve would provide duty of care to its departing team members.
In the message, Egan said: “To the Evolvers we are saying goodbye to, I recognise and take full accountability for the profound impact that this will have on you and your families. I am deeply grateful for all the hard work, talent, and passion you brought to your role and to Evolve as a whole – thank you. It has been a privilege to be your teammate. Please know we are all committed to supporting you through this difﬁcult time and to helping you find your next opportunity.
“For our teammates who are staying, today is a hard day, and it’s a lot to process. I want you to know that I remain incredibly conﬁdent in, and energised by, our opportunity and the pursuit of our vision. As we move forward together, we will continue to narrow our focus on elevating the experiences of our Evolvers, owners, guests, partners, and all stakeholders by bringing hospitality to the forefront of everything we do.
“I will be leading an all hands meeting tomorrow to unpack that for you and detail our plans for the rest of 2023,” he added.
When Evolve raised $100 million in fresh capital last February, taking its total funding to $235 million, it claimed to be “the fastest-growing vacation rental hospitality company in North America”. At the time, the business said that it was seeking to expand its portfolio of more than 19,000 vacation homes in 750+ markets, with each listing on its platform reportedly generating 38 per cent more revenue than the market average in 2021.
While a number of property management companies have committed to extensive layoff rounds in recent months, Evolve said that the job cuts were not down to profitability reasons but a need to reduce the size of the team to “align the overall expense structure to this new market context”. Many hospitality and technology firms became overstaffed after having to rehire again following layoffs and furloughs during the pandemic, nevertheless Evolve maintained that it had a “healthy balance sheet and robust property growth” to see it through the changes.
In recent months, Sonder also made 14 per cent of its team redundant [around 100 corporate employees] in March, citing a need to increase its cash flow and expand into new industry segments.
The likes of Vacasa [17 per cent workforce reduction in January – its third round of job cuts in six months], Blueground [an undisclosed amount of company-wide layoffs in April] and AvantStay [22 per cent of its team – 144 employees laid off in November] have also all undergone sweeping job cuts since the end of 2022 due to the need to reduce costs.