Like all of you, I’ve watched with dismay as COVID-19 disrupts our world and radically re-shapes our lives. As I write this, half of the world’s population shelters-in-place and the resulting business stoppage has unleashed economic calamity unparalleled in our lifetimes. For Newfront, the virus paralyzes some of our customers, dramatically slows down our unprecedented rate of growth, and freezes up the capital markets upon which high-growth businesses like Newfront depend.
When operating conditions change radically, a business must adapt. For Newfront, the shift in credit markets and the consensus outlook for near-term economic activity presents us with a dramatically different set of operating conditions than we had anticipated at the start of the year. On Monday we made the incredibly difficult decision to restructure our business to operate effectively within the new environment. Unfortunately, that required us to reduce our workforce, especially on our engineering, recruiting, strategic growth, and operations teams.
We did everything that we could to avoid this moment. We slashed non-essential spending on events, advertising, and travel. We instituted a hiring freeze. We cut most of our executive pay by 20%. My co-founder Gordon and I cut our salaries to zero. But in the end, these alone were not sufficient to achieve the safe harbor needed for us to renew our focus on driving innovation and unparalleled service to our customers.
These cuts are business-related and not in any way reflective of these individuals’ performance. I’m so grateful to each teammate for their dedication to Newfront and their hard work to drive our business forward. We are doing what we can to support those whose roles were reduced in this difficult time, including offering severance packages and extensions of the time periods for them to exercise their stock options so that they remain Newfront shareholders and a part of our community.
With all this said, I can tell you that I have never been more dedicated to our company or more convicted about our long-term prospects. Following this painful day, we stand on sound financial footing. I am fully confident that Newfront will emerge as a highly impactful and lasting business that will transform our industry.
These next few weeks will be among the hardest in our nation’s history. In spite of this, we will build this business and care for our customers because we owe it to each other and to the people we are losing today, who will always be a part of the Newfront family.
Stay safe and healthy.