Kevin Gidney, the co-founder of Seal Software, which was bought by DocuSign, is leaving as the e-signature giant cuts 9% of its staff, about 670 people. Gidney said Artificial lawyer: “I’m leaving, yes. Based on mutual separation. So I can pursue other interests.
He added that he had wanted to leave for some time but had been unable to reach the right terms with DocuSign, and that this restructuring actually made it easier for him to leave the company, which bought Seal in 2020 — a decade after he and Wolf Zetterberg created it.
Gidney’s departure means several of the top teams have already left. Zetterberg left soon after the purchase was made and Jim Wagnerwho was then Vice President of Strategy at Agreement Cloud, left at the end of 2021. At DocuSign, Gidney (pictured above) held the title of Vice President and Distinguished AI/ML Engineer.
Artificial Lawyer reached out to several other people at DocuSign on the legal technical side of the business who said they are staying and have survived the layoffs. David Silbertsenior director for Cloud Cloud and was at Seal, remains. Jason Smith, who is currently Sr. Director – Cloud Strategy Agreement, remains and only joined in January from Elevate. While, Dan Selman, CTO of Clause, the smart contracts company that DocuSign bought, also said he’s staying. And of course there may be others who leave. A DocuSign spokesperson said they could not provide the names of those leaving.
One industry source who knows DocuSign well told this site, “They’re still guarding [legal tech] products they have purchased. But all of the company’s sales and management energy is now focused on the enterprise and doing less commodity work. This is the goal.
They also emphasized that the focus on leveraging NLP, for example through Seal’s combination with the acquisition of SpringCM to provide a CLM capability for clients, remains in place. They added that there was an increase in the use of e-signatures during the pandemic, but that this has decreased now that people are moving more freely again. This may be the main reason for the layoffs.
Here’s the company’s latest SEC filing, which provides more information:
“On September 26, 2022, the Board of Directors of DocuSign, Inc. authorized a restructuring plan (“Restructuring Plan”) which is designed to improve operating margin and supports the company’s growth, scale and profitability goals. As part of the Restructuring Plan, the Company expects to restructure and reducing the current workforce by approximately 9%.
The company at the moment estimates that it will incur charges of approximately $30 million to $40 million in connection with the restructuring plan, consisting primarily of cash costs for employee transfers, notice period and severance benefits, employee benefits and related costs, and non-cash costs related to the grant of stock-based awards. The Company expects that the majority of restructuring costs will be incurred in the third and fourth quarters of fiscal 2023 and that implementation of the restructuring plan will be substantially complete by the end of fiscal 2023.
Potential position eliminations in each state are subject to local legislation and consultation requirements, which may extend this process beyond fiscal year 2023 in certain states. The fees we expect to incur are subject to a number of assumptions, including local law requirements in various jurisdictions, and actual costs may differ from the estimates disclosed above.
And below is the company’s stock price. As you can see, the stock performed extremely well during the pandemic, but has fallen significantly since then. This was also no doubt playing on the minds of the directors.
One final point, the SEC filing says the cuts could continue into 2023, so there could be more surprises. Also, there’s no guarantee that once a company has made cuts of such a magnitude that they won’t make more if they don’t get to where they want to be, they ended up saying “roughly 9%” – that’s not a set number in stone.
In conclusion, Gidney was at the heart of Seal’s success, but like all post-acquisition companies, eventually the technology was integrated and blended with other products. As the industry source noted, the strategy is to scale up the plant’s operations — which is largely the focus of Seal’s technology. So in the longer term, and despite the volatility these layoffs cause, it looks like DocuSign will continue with its NLP-driven CLM strategy and perhaps even expand upon it.
This site wishes Gidney the best of luck in whatever he does next.
Seal Co-Founder Kevin Gidney Departs As DocuSign Axes 9% of Staff