In the first post in this series, I shared some of the background details of TradingPartners' recent restructuring. In this post, I'll continue the analysis, including some additional learning I was able to glean from a former senior leader in the organization. According to this individual, the last six managing directors, who "ran different regions of the world" for TradingPartners "were the driving force behind sales" for the organization. Yet "all six have left the organization in the last year," of which "five opted to leave."
Moreover, this individual says that TradingPartners "closed the Dallas office" and recently shuttered "Atlanta and NYC" as well. Even though Marc Halpin, TradingPartners' CEO, shared with me that the company is "seeing significant traction and growth" in Latin America, the former senior leader I spoke with suggested that while "TradingPartners expanded business in South America to serve a major retailer," they have not opened any offices there to the best of his knowledge.
This person also gave more visibility into the recent layoffs, suggesting that in the past couple of weeks, they "let go of a couple of supply managers and senior level people." I asked what percentage of the firm, and he replied based on his current contacts that "15% seems light."
However, our interview with another former employee suggested the 15% (in North America) seems about right. However, when the former senior leader was involved, TradingPartners had over 90 employees globally and he now guesses that the current number is potentially "down around 40," i.e. substantially less than what TradingPartners shared with Spend Matters. To him, considering both the recent departures, which consumed many in North America, and layoffs, "it feels like an extreme cutback."
Marc, however, disagrees, suggesting that the current restructuring was required based on "how we operate and the skill set required to deliver fully hosted reverse auctions." Marc further suggested that "2010 numbers are up over 2009" and the forecast/overall revenue/customer delivery numbers are up as well. The company also has a "new head of sales and a new head of operations." Yet others close to the organization suggest that some of the sales people reporting to this individual have only "one year of overall work experience."
Marc is stalwart in his suggestions that the firm is on solid footing and the changes were for the best, noting that, "If I look at what has happened in the US, we need consistency and operational delivery [to meet customer needs]. I now have one operational lead in the US and we've centralized efforts in one operational office." Still, Marc suggests, contradicting other sources, that headcount will be "flat this year". Others we spoke claim that TradingPartners would need to "hire over 30 new people this year to be flat" just to replace those who have already left. Regardless, Marc says that around "70% of the current team" is focused on what counts the most: "strategic sourcing delivery."
What is the Spend Matters take on the situation at TradingPartners? Based on the conflicting information we have heard from internal and external sources as well as the departure of the entire group of Managing Directors, we encourage both new and potential TradingPartners customers to conduct further due diligence on the organization, although the company's CEO appears completely stalwart in painting a completely positive picture (which is usually uncommon in such situations and leads us to believe perhaps firm headcount and revenue potentially will be up and flat respectively this year, given Marc's statements).
Stay tuned for the final post in this series, where we'll look at how the market for reverse auction and strategic sourcing services in-a-box are evolving.