Melbourne tech company Envato lays off 100 staff

The Melbourne tech company blamed inflation, the Ukraine invasion and increasing competition as the reason for the lay-offs, despite record operating profits.

An Australian company that made $228.5 million in revenue in the past financial year has sacked 100 staff.

Melbourne-based Envato, which runs a marketplace that offers access to things like stock photos, graphic design templates, audio and fonts, blamed economic factors such as inflation and Russia’s invasion of Ukraine, as well as increasing competition in the sector.

Despite the company being valued at more than $1 billion by the Australian Financial Review Rich List, Envato CEO Hichame Assi said the redundancies were part of a need to update its “focus” and core products after 16 years of operating.

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The basketball court in the Envato offices back in 2019. Picture: Supplied

He said Envato, which reported a 76 per cent leap in operating profit to a record $36.5 million in the 2020/21 financial year, needed to invest in more complex products as things like stock images become increasingly available.

“The impacted roles are across the business and not concentrated in one particular area, and take in all of our locations: Australia, New Zealand, Mexico and the USA. This is a whole-of-business change to our focus and product approach,” he told news.com.au.

“We started making changes last week and meetings with impact roles are ongoing until the end of this week.”

An employee in the Envato offices in Melbourne back in 2019. Picture: Supplied

Envato had employed 700 people before the lay-offs and its Melbourne office boasts a basketball court and pool table, piano and space invaders table in its lunchroom.

Mr Assi pointed to the impact of Ukraine invasion on creatines with a significant amount of its authors based in either Russia or Ukraine from WordPress developers to video producers and everything in between.

“The war has clearly had an impact on our creative community given the number of creators who live in the region, however, it’s not the only factor in this decision; we have to account for rapid changes in market conditions relevant to our sectors,” he added.

“We were spread too thin across all the products we had established. While they’re all creative products, some are older with legacy platforms.”

Employees impacted by the redundancies are being offered 12 weeks of pay, they can keep their company laptops and Envato’s recruitment team is helping them with their CVs and finding new roles, according to Mr Assi.

Envato is not the only Australian company making lay-offs this year.

Envato previously employed 700 people. Picture: Supplied

Its co-founders were 149th on the rick list. Picture: Supplied

5B Solar, an Australian company focused on solar power projects sacked 25 per cent of its workforce two weeks ago.

It blamed supply chain and logistics disruptions brought on by the pandemic, as well as the shortage of materials and a spike in prices partly brought on the invasion of Ukraine.

The company had just completed a capital raise that it kicked off in August last year, which would inject $30 million into the business. It also plans to raise another $20 million.

Last month, buy now, pay later provider BizPay, which has offices in Sydney, was a another company to make a heavy round of cuts.

It made 30 per cent of its workforce redundant blaming market conditions, yet, the company was in the process of trying to raise $25 million in funding and had partially completed it.

Originally published as Melbourne tech company Envato lays off 100 staff