Westlake-based Hyland Software lays off 1,000 employees; AI impacts Greater Cleveland economy? (layoffs, movies)

[WRnative]

<<Hyland Software, a Westlake-based software and digital services provider, announced Monday that it is laying off 20% of its workforce, or about 1,000 employees.>>


https://www.news5cleveland.com/news/...-its-workforce


It's unclear how many of the employees laid off are based in Westlake, as opposed to nationally and internationally, but likely a significant amount.


Given the economic "multiplier" effect, these lay-offs may result in job losses of 3-5,000 on the West Side, if the employees are not hired quickly by other Cleveland-based employers. The multiplier effect may be much higher as described in the following article, as Hyland draws revenues into the economy from regions outside of Greater Cleveland and likely these jobs eliminated are relatively highly paying.


https://www.investopedia.com/terms/m...liereffect.asp



The job losses will hit hard the Westlake city budget as municipal income tax revenues will be decreased.


Potentially, even housing prices may be impacted, especially as others worry about job losses.


A bigger worry is that competitors or potential competitors, such as perhaps even Google and Microsoft, are incorporating Hyland content management services into the competition's software/cloud offerings, perhaps using artificial intelligence to increase relative performance versus Hyland, or making content management part of much more integrated software products. As Hyland is a private company, it will be relatively difficult to learn why Hyland is suffering reduced business activity, and the extent of its financial difficulties.



https://www.hyland.com/en/company/what-hyland-does


https://en.wikipedia.org/wiki/Hyland_Software


There has been much discussion about the impact of artificial intelligence on the economy, and one vulnerable sector may be software firms lacking expertise in AI, especially compared to bohemoths such as Google and Microsoft.


"Generative AI" is a mushrooming economic sector expected to impact greatly human economies and society extraordinarily rapidly.


"Companies who don't truly embrace generative will see their multiple compress by 50% over the next five years," RBC Capital report said in a recent note to clients. "We believe every technology company needs a strategy to truly embrace generative AI, otherwise they will be left behind by those that do."


The report went on to say: "Not only will these companies see market share losses over time, but they will also see multiple compression as investors lose confidence in the ability of those companies to be future-proof."


The generative AI wars are heating up in marketing. Salesforce (CRM) on March 7 rolled out Einstein GPT, which adds OpenAI's features across its software platform. Pilot technology will be available first on its Slack messaging tools. Salesforce has used predictive AI tools since 2016....


"We see (generative) AI becoming 'table stakes' for most software companies," Evercore ISI analyst Mark Mahaney said in a report. "This generally favors the bigger companies with deeper pockets and access to more data." [BF emphasis added.]


Key to the rise of generative AI are improved natural language processing models that help computers understand the way that humans write and speak.>>


https://www.investors.com/news/techn...igence-stocks/


https://en.wikipedia.org/wiki/Genera...l_intelligence


There's a chapter on artificial intelligence in Nouriel Roubini's "Megathreats." I haven't yet read that chapter. See post 311 in this thread.


https://www.city-data.com/forum/ohio...n-ohio-32.html


See "Expect technological disruptions" here:


<<
It’s the stuff of science fiction movies: a world where machines are so sophisticated they can do our work for us, freeing us to pursue more leisurely activities. Yet, as artificial intelligence (AI) leaders caution, this future may be closer than we think. Indeed, AI-powered automation is already on the rise, and machines are expected to take over a growing proportion of professions in the coming years.


In fact, AI could eventually render entire professions obsolete, displacing some people while benefiting the richest few. Roubini is sure we are entering a new era of economic and social disruption that has wide-reaching implications for us all. He is not alone in this. Many industries are already aware that AI can perform tasks better than humans.>>;



https://paminy.com/book-summary-mega...e-how-survive/


https://www.forbes.com/sites/qai/202...h=7c6553943624

[bjimmy24]

I will not claim to be an expert, but I am in the industry. Hyland was long a darling of the Cleveland tech scene, took talent from all over the place, attracted with a lot of great employee benefits and perks. Hired big time during Covid, the layoffs now honestly just reflect dumping the same number of people as they hired in 2020-2021. Which is the trend we see across tech, as you've probably read about at places like Meta, Amazon, Alphabet etc. So overall I find this to be basically the same thing. Companies bit off more than they could chew long term when the world went upsidedown during Covid and tech made an absolute killing. Hyland after the layoffs will reflect what it was in 2019, which I don't think is apocalyptic.

Of course another side to this is the fact that they were bought out by Thoma Bravo, which means you can pretty much bank on massive layoffs at some point.

https://www.forbes.com/sites/loracec...h=7b6e06fc7024

Using history as a guide, when Thoma Bravo buys a company, the first impact is managerial turnover, layoffs and cut-backs. For the user of software, this translates to a redefinition of the relationship. Due to turnover, the day-to-day contacts change, and most of the software company thought leaders take the pay-off from the buyout and leave. As a result, the supply chain leader is forced to do business with a much weaker company creating supply chain risk. The continued, and unabated acquisition of software companies by venture capitalists is a major risk to supply chain resiliency.

Someone else may want to check me on this, but I think I also recall Hyland having many employees be totally remote since Covid, unless I am mixing them up with someone else. Anyway, I doubt many of the hires since 2020 actually moved anywhere new at all.

[MPK21]

Originally Posted by bjimmy24

I will not claim to be an expert, but I am in the industry. Hyland was long a darling of the Cleveland tech scene, took talent from all over the place, attracted with a lot of great employee benefits and perks. Hired big time during Covid, the layoffs now honestly just reflect dumping the same number of people as they hired in 2020-2021. Which is the trend we see across tech, as you've probably read about at places like Meta, Amazon, Alphabet etc. So overall I find this to be basically the same thing. Companies bit off more than they could chew long term when the world went upsidedown during Covid and tech made an absolute killing. Hyland after the layoffs will reflect what it was in 2019, which I don't think is apocalyptic.

Of course another side to this is the fact that they were bought out by Thoma Bravo, which means you can pretty much bank on massive layoffs at some point.

https://www.forbes.com/sites/loracec...h=7b6e06fc7024



Someone else may want to check me on this, but I think I also recall Hyland having many employees be totally remote since Covid, unless I am mixing them up with someone else. Anyway, I doubt many of the hires since 2020 actually moved anywhere new at all.

Makes sense. Tech is currently getting hit from coast to coast and everywhere in between largely due to its over hiring in the pandemic era and a slowing economy, at least for the tech industry.

Buyouts=layoffs.

[216facts]

Agree with what's been said so far. Tech is going through another adjustment, happens periodically. So far, nothing like the dot-com adjustment of 2000/2001 (somewhere around there.) I predict most of those workers will find jobs fairly quickly, those IT/SW guys can work anywhere and are always in demand.

[WRnative]

Originally Posted by bjimmy24

Of course another side to this is the fact that they were bought out by Thoma Bravo, which means you can pretty much bank on massive layoffs at some point.

https://www.forbes.com/sites/loracec...h=7b6e06fc7024

I wasn't aware that a private equity firm controlled Hyland, so thanks for that info. Found this article:


https://infodnasolutions.com/how-pri...ook-at-hyland/


As with many private equity acquisitions, it sounds as is Thoma Bravo is operating Hyland as a cash cow, limiting its development potential. I wonder if Hyland's debt mentioned in the above article was obtained through Silicon Valley Bank, noted for financing venture capitalists and private equity firms and which recently collapsed, and if the SVB failure influenced the Hyland employee reduction decision in some way.

Also reading the above linked article, and due to reduced staffing, Hyland may not invest aggressively in generative artificial intelligence applications.

[Westside Bill]

The speculation of my friends who are or were Hyland employees is that the equity capital owners of Hyland are fattening it up to sell it. Hyland had a good year last year and the employees got nice bonuses in December. The remaining employees get a bonus if they stay till this December

[216facts]

Originally Posted by Westside Bill

The speculation of my friends who are or were Hyland employees is that the equity capital owners of Hyland are fattening it up to sell it. Hyland had a good year last year and the employees got nice bonuses in December. The remaining employees get a bonus if they stay till this December

Sell it again? Wow. Any idea how many employees they had locally?

[Westside Bill]

1760 regionally. Probably 300 in Westlake. Laid off employees got an email in their inbox at 8:00 on a Monday morning that they were terminated. Cold. I was in a bar/restaurant near Hyland that day for lunch. Several laid off workers ere pounding down double shots of Titos. Not a fun scene.