Constant Contact Cuts 15 Percent of Staff After Its Acquisition

[Updated 2/12/16, 2:57 p.m. See below.] Constant Contact laid off about 15 percent of its employees worldwide this week, casualties of the integration process with its new parent company, Endurance International Group Holdings.

Endurance (NASDAQ: EIGI) confirmed the job cuts in an e-mail to Xconomy Thursday night, two days after Burlington, MA-based Endurance’s $1.1 billion acquisition of Waltham, MA-based Constant Contact officially closed.

An Endurance spokeswoman e-mailed us a statement that she attributed to Endurance chief operating officer Ron LaSalvia. In it, he didn’t provide an exact number of job cuts or specify which departments were impacted, but he said the layoffs were spread across Constant Contact’s six U.S. offices and one U.K. branch. The e-mail marketing firm employed 1,400 people when the acquisition was announced in November, so that likely means roughly 210 employees were let go. (Endurance, which owns a number of brands that provide technology services to small businesses, said this week that it employs more than 2,500 people worldwide.)

Endurance also plans to “concentrate” Constant Contact’s employees in three of its locations: Waltham; Loveland, CO; and one of its two New York offices, LaSalvia said. Constant Contact will close its offices in London, San Francisco, and Delray Beach, FL, as well as its other New York location, the spokeswoman said. [This paragraph was updated after confirming the office closures.]

“Any time you bring together two strong public companies, there is naturally going to be some overlap in certain functional areas,” LaSalvia said in the e-mail. “Reductions in headcount are a reflection of the overlap in our businesses as we strive to deliver great products to our customer base while investing in future growth.”

The move isn’t surprising, as pink slips are often handed out in the wake of mergers and acquisitions. Outgoing Constant Contact CEO Gail Goodman alluded to the possibility when the deal was announced. “Clearly, there will be some overlap in corporate functions, but we expect the vast majority of employees will be part of the ongoing entity,” she told Xconomy at the time.

Goodman is stepping down as planned, and Constant Contact CFO Harpreet Grewal has been named the company’s general manager, LaSalvia said.

“As you’d expect, this kind of acquisition brings a number of changes,” according to an e-mailed statement attributed to Goodman. “While I’ll continue to support the team through this transition, I won’t be leading Constant Contact going forward. I haven’t thought yet about what my next chapter looks like.”

Jeff Engel is Deputy Editor, Tech at Xconomy. Email: jengel@xconomy.com Follow @JeffEngelXcon

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