Ellie Mae lays off 10% of its staff after recent acquisition
BRAD FINKELSTEIN MAY 17, 2019
Mortgage technology company Ellie Mae, which was recently bought by private equity investor Thoma Bravo, underwent restructuring and reduced its staff by 10%.
Based on prior public filings, the company eliminated approximately 160 positions. As of Dec. 31, 2018, Ellie Mae had about 1,570 employees, according to a Securities and Exchange Commission filing. Just seven years prior, it had only 270.
The purchase of the Encompass loan origination system operator by Thoma Bravo was announced in February and completed on April 17.
At the time of the deal, analysts that followed Ellie Mae as a public company said going private would allow it to grow and maneuver without having to worry about investor demands.
"Since the Thoma Bravo acquisition announcement in February, our leaders have been working on a plan with Thoma Bravo that enables us to continue to execute our strategy and maintain our leadership position in the market," an Ellie Mae spokeswoman said in a statement. "To do this, we need to focus on our key priorities and deliver on a combination of both growth and profitability.
"While our strategy is the same, we now move forward as a private company, which required some restructuring in order to both achieve our financial goals, as well as to improve our ability to deliver on all of these critical initiatives.
"As part of this restructuring, we have made a very difficult decision to inform a little over 10% of our population from across the company that they will no longer be Ellie Mae teammates. These are not changes we take lightly. We will ensure our impacted teammates are treated with dignity and respect and they will be offered a package to assist them through this transition," the spokeswoman said.
The spokeswoman did not discuss specifics regarding from which units the positions had been eliminated, but Ellie Mae was an active buyer of other companies, most recently Velocify.
Employee expenses were $10.3 million higher in 2018 than 2017, because of the additional headcount, the SEC filing said.
In the fourth quarter of 2018, Ellie Mae reported net income of $84,000, compared with $12.4 million in the third quarter of 2018 and $9.9 million in the fourth quarter of 2017.