UiPath bleeds cash, prompts latest huge layoff wave

RPA vendor UiPath lays off about 15% of its workforce. Some say it grew too fast, spent too much, and simply ran out of cash.

Other observers point to failures in execution—illustrated by the exits of three C-level execs at the robotic process automation firm. The CFO is the latest to see the chopping block.

It’s being compared to the WeWork débâcle. That’s gotta hurt.

Icarus-like, UiPath flew too close to the sun, it seems. In IT Blogwatch, we unpick the story. Your humble blogwatcher curated these bloggy bits for your entertainment.

[A previous version of this article calculated the percentage of laid-off employees at 20%. Estimates of the total number of UiPath employees vary, so I've revised it down to 15%.]

“Pride goeth before destruction”

What’s the craic? Anthony Noto reports—Cash-burning UiPath lays off hundreds:

"UiPath is another WeWork," one observer told me. "Dial back the rhetoric."

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Despite a showy Las Vegas convention and claims to an astronomical valuation, robotics firm UiPath is not making enough money. [It] has laid off hundreds of workers this week and more cuts are on the way, sources [say].

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Among those who lost their jobs [was the CFO] who had only been in the post since January. … A hiring spree was promised [recently, but] that no longer seems to be the case.

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This is the latest … in a series of layoffs for [UIPath]. That's not including the discreet exit of [the CIO and the] Chief Revenue Officer. … It raised $1 billion in total venture capital, but sources … say those funds are depleting.

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The job losses were expected [after] the company's costly Las Vegas event, which took place last week. Costs [were] double the amount that UiPath originally set aside for the event. … UiPath had expected a crowd of 3,000 for the Bellagio event. By Oct. 10, the event had 2,170 registrants. … How many of those were comped is not yet known.

Ouch ouch ouch. Nick Ismail adds—UiPath fires hundreds of employees:

This represents a major credibility crisis for UiPath. [It] highlights the systemic problem of chasing market share and over valuation.

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An internal source suggests that this came as a surprise, given the fact [it] attracted $568 million in Series D funding this year. But the insider claims that the [fast] cash burn at the company … is a factor in these redundancies.

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A “land grab for logos”, while speeding up growth, is not a savvy business strategy. Revenue needs to be high quality and targeted, not smash and grab. … There is a major lesson: … UiPath will need to answer some serious questions around its conduct and strategy.

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RPA … will not die here. [RPA] has a fundamental role to play in the future of automation in the workplace.

Crisis? What crisis? Harrison Goode—asks the questions:

Did they grow too quickly and over hype RPA? Personally I don't think the RPA market is facing a crisis.

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[But] any organisation in an emerging tech market needs to grow responsibly and [be] careful not to over hype. … It's a shame that so many people are out of work because of this.

And Phil Fersht offers his take—Let’s just say the hype bubble got popped:

UiPath is realising to its cost that intelligent automation is a marathon, not a sprint. It pushed the hype around RPA far too aggressively.

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[It’s like the] investor scrutiny after the WeWork debacle. … They simply could not justify their burn rate of cash versus customer demand.

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[But RPA has] some terrific benefits to support efficiencies and process transformations. … It forms part of a broader toolbox as companies evaluate both automation and AI options.

Follow the money. Sarah Burnett—listens to the whispers:

I hear both CRO and CFO have gone. Sounds like the revenue targets were missed.

But how did we get here? Indivar Khosla—wants to get back to basics:

When will we (industry) learn? There are no silver bullets and shortcuts!

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Let’s tune out the noise and get back to basics.

Meanwhile, Mike Minelli—sheds no tears:

The [Automation Anywhere] team had a great day.

And Tim Csontos—is firmly on message:

To all the UiPath employees out of work – if you're good at what you do we're hiring at Automation Anywhere.

You have been reading IT Blogwatch by Richi Jennings. Richi curates the best bloggy bits, finest forums, and weirdest websites… so you don’t have to. Hate mail may be directed to @RiCHi or itbw@richi.uk. Ask your doctor before reading. Your mileage may vary. E&OE.

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