Exclusive: Jimdo lays off employees

The Hamburg-based start-up sent parts of its marketing team out the door on Monday. CEO Henze speaks of a necessary restructuring.

After a video call, it was all over for some employees of the Hamburg-based startup Jimdo. The marketing team was not profitable enough, CEO and founder Matthias Henze is said to have announced to them there; he himself speaks to Startbase rather of expectations not being met. They then received their letter of termination and a settlement agreement, with strict confidentiality clauses.

Anyone who signs it is not allowed to make any "adverse or unfriendly statements" regarding Jimdo, "especially in the press or social media," it says. The termination letter simply states as a reason, "We explained the reasons for our decision to you in a personal conversation." Both contracts are in Startbase 's possession.

The flagship startup mercilessly laid off employees, one of the terminated individuals, who prefers not to read her name in the press, tells Startbase. "The dismissed colleagues are disappointed and stunned by the prompt termination." Many apparently feel they have been treated unfairly. "Since Jimdo has no works council, it was decided who had to go without considering any social and individual situations," one of the dismissed accuses the startup.

Jimdo offers, among other things, a construction kit for websites or a professional online store. The start-up focuses primarily on the self-employed, sees itself as a one-stop-shop solution, also helps to create legal texts for website and online store that are safe from warnings. "For us, you self-employed are the true heroes of our economy," it advertises on its site. According to its own information, Internet presences have already been created with Jimdo's offer in more than 190 countries and 32 million websites and stores have been built.

If you talk to founder and CEO Matthias Henze himself, the first thing you get is the image of decent growth in the area of personnel. "Before the pandemic, we employed around 200 people, now we have 340," he says. More and more products for the self-employed have been added in recent years.

At the same time, the startup has already had a major wave of layoffs. In the fall of 2016, CEO Henze laid off a quarter of his staff - even though the company had a successful business year behind it, according to statements made by the founder in an interview with Impetus had a successful business year behind it. The reason he gave was that product development had been too slow.

There is obviously a bad mood among the workforce in view of the recent layoffs. Those who stayed on are now wondering what's going on and whether they're next, at least according to those who were laid off. There are also rumors that the startup now wants to outsource its marketing to the US. Jimdo should be honest and say why they really fired so many people overnight for no reason, he said.

"We are not where we want to be with marketing. That was the reason for the restructuring," Henze told Startbase. As a result, he said, the startup laid off under 20 employees from its marketing department. He would not comment on how large the unit remains now, what will happen to it - and whether more marketing will be outsourced to the United States. "It was important to us to explain the reasons to people individually," he says. "We tried to find the most humane way possible for the layoffs," Henze says. But in remote, he says, that kind of thing is always difficult. Henze, who says he has also taken part in talks, does not want to be more specific. The managing director does not want to talk about "not profitable enough" in this context. Marketing is usually an upfront investment.

The fact that a department is "not profitable" is not in itself a reason for dismissal, says Nathalie Oberthür, a specialist in labor law and chairwoman of the Labor Law Committee of the German Bar Association. "However, it can be the motivation for an entrepreneurial decision that makes the need for employment cease to exist and can thus justify a termination." This could then actually include the abandonment of marketing activities or their assignment to external service providers. The formulations on confidentiality and the requirement not to make any damaging statements to the press, provided that the settlement agreement is signed, are also common, he said.