Economic distress
Major Austin tech company unplugs 650 jobs in response to COVID-19 pandemic
Austin-based hardware and software company NI (formerly National Instruments), one of the largest tech employers in Central Texas, is notifying more than 650 employees this week that they’re losing their jobs.
NI announced October 29 that it would reduce its global workforce by about 9 percent over the next nine to 12 months. The move comes in response to the recession caused by the COVID-19 pandemic.
The company didn’t specify how many employees would be let go. But at 9 percent, about 650 employees — including 200 in Austin — would be laid off, based on a global workforce of about 7,300. Before the layoffs, NI employed about 2,200 people at its North Austin headquarters.
In a letter to employees, NI president and CEO Eric Starkloff said this “hard but necessary decision” would affect employees across the company's various worksites around the world.
“My promise to you is that we will go through this process in the most thoughtful, compassionate, and transparent way possible — out of respect to those impacted as well as those staying to lead us into the future,” Starkloff wrote.
Starkloff became NI’s CEO in February after having served as president and chief operating officer. He took the helm from Alex Davern, who stepped down in January.
The layoffs will help NI “manage the short-term uncertainty created by the pandemic,” Starkloff said.
“Our customers have felt the economic impact created by the COVID-19 pandemic, and so have we,” he wrote. “We now know that the global recovery will be longer and more gradual than just about anyone initially predicted.”
Starkloff said layoff notifications would start November 2, be paused on Election Day and continue through November 6, except in countries that impose different legal requirements. Workers who are being let go will receive compensation, severance packages, and outplacement services.
In addition, NI is extending early retirement offers to employees who aren’t part of the layoffs.
In a filing with the U.S. Securities and Exchange Commission, NI noted that it launched a restructuring in early 2017, including workforce reductions. Last December, the company said it was laying off 150 employees.
On October 29, NI reported third-quarter revenue of $308 million, down 9 percent from the same period last year. The company posted a third-quarter net loss of $4.6 million, compared with profit of $51.6 million in the same period last year.
“We have and will continue to take a broad range of actions to ignite growth. Building on our unique software position, we believe we have the opportunity to once again modernize and disrupt our industry,” Starkloff says in a release. “We remain focused on execution in the areas of our business that can drive our growth even within the constraints of an overall weaker spending environment. The actions we are taking, on both reductions and investments, are focused on achieving long-term growth.”
