How Celonis has avoided mass layoffs

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This piece has been updated for clarity around small-scale job cuts and future hiring plans at Celonis. 

Back in June 2021, data processing unicorn Celonis closed a $1 billion funding round; one notable investor was Ryan Smith, Qualtrics founder and owner of Utah Jazz. This influx of capital increased its valuation by 340% from $2.5 billion in 2019 to $11 billion.

As a result, Celonis became New York and Germany’s most valuable startup (it has dual headquarters in New York and Munich).

This is a hugely impressive achievement for a company that is only ten years old and had a tricky first five years convincing investors that data mining was a good use of their money.

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As 2021 progressed, Celonis did not stop and continued to scale and grow; in fact, another $1 billion investment round pushed its valuation up again to $13 billion.

All of this means that like many tech giants Celonis experienced hypergrowth during the pandemic. But the important difference between the data processing company and the likes of Amazon, Meta, and Google is, as economic factors have shifted, Celonis has not been forced into a mass layoff of its staff.

UNLEASH sat down with Andre Heinz, chief people and culture officer at Celonis, to find out why.

Taking the long-term view

Heinz shares that the core of Celonis’ business is to use data, analytics and process mining to “reveal and fix inefficiencies inside businesses….And then we continuously improve the way that organizations run”.

This means that while Celonis’ work has a huge impact on businesses, it isn’t a quick fix; it is a long-term piece of work to ensure businesses are working as efficiently as possible.

“We want to build a long-term business that becomes very meaningful in the industry”; this is mirrored in how Celonis thinks of itself as an employer.

Heinz notes: “When we develop our people strategy, we aim to really understand the long-term mega trends on a socio-economic level” – to do this, Celonis works with analysts and academics to look “over the shoulder of our employees” and stay ahead of what’s coming in the future. It makes sense for a data mining company to lean into the data in all elements of its business.

This long-term view of employment, combined with Celonis’ DNA to be “very careful on cost management”, has “helped us be very strategic with our hiring”. While Celonis tripled its headcount during COVID-19, that was in the context of a 420% increase in its valuation and continued demand for its products.

“We were able to grow very fast despite the pandemic because we continued to see a really strong demand from our customers,” explains Heinz. “A lot of companies had to think through supply chain and process inefficiency, and this is where Celonis is really core to helping industries address those challenges.

“Celonis really helps companies to be more resilient in the crisis environment”. This continued beyond the pandemic and into the next crisis, an economic one.

While the likes of Meta, Amazon and Google hired too quickly, and unsustainably, during the pandemic, and now business demand is dropped they’ve had to do mass layoffs, by comparison, Celonis has avoided large scale job cuts.

Of course, it has had to cut jobs in areas like recruitment – Heinz tells UNLEASH: “In comparison to the past couple of years, where we have seen unprecedented growth rates across the board, we will now adjust the pace of our hiring and focus on certain areas of the business, which means that we need less recruiters this year.

“Overall employees at Celonis have not been impacted significantly. When we look at overall changes in the last 12 months we are talking about a double-digit number worldwide (and we currently have more than 3,000 employees).”

The reason Celonis has managed to avoid mass layoffs is because of the “economic success that we’ve had despite this environment. We are really responding to very relevant customer needs”.

Clearly, taking a long-term, thoughtful view about your business and your HR strategies pays dividends when an economic crisis hits.

Thriving in the Great Resignation

Despite this challenging economic economic environment, Celonis is continuing to hire in the US and in Europe.

Across this financial year, the tech company plans to hire more than 600 employees, particularly in product, engineering and service roles. “These areas are the top priority for our company this year to achieve our objectives and goals,” notes Heinz.

To do this, Celonis will be drawing from a pool of talented tech workers who have either been laid off by other companies, or have voluntarily quit in the Great Resignation.

“The world is in the middle of the ‘Great Resignation’, but we’ve been growing significantly”, notes Heinz. “The Great Resignation has given us the opportunity to attract top talent.”

But Celonis hasn’t forgotten about its existing employees – or ‘Celonauts’ – and their needs.

It leverages CultureAmp, for both individual feedback and quarterly engagement surveys. The HR team wants to “continue to hear what’s going well, [and] where we need to adjust”.

While one of Celonis’ HR priorities is “giving people the opportunity to grow” – “we’re a very fast growing business, which gives many learning opportunities. There are constantly chances to take on more responsibility” – in a recent CultureAmp survey, Celonauts shared they wanted even more focus on their career development.

In response, the HR team built the next iteration of CeloVate, Celonis’ performance and development process, including introducing a global mentorship program. The employer has also increased its investment in learning tech with the introduction of Degreed and LinkedIn Learning.

Andre Heinz, chief people and culture officer, Celonis.

Overall, the Great Resignation has been a net positive for Celonis. “Turnover rates have fluctuated, but we’re on the mid to lower end of the benchmark”, shares Heinz.

Interestingly, Heinz explains that Celonis research found that “about a dozen of our former employees [had started] their own companies, quite successfully.

“We are proud that some people who had left had so much exposure to being in an entrepreneurial environment that they decided to start their own business”.

Sustainability, community and diversity are front and center

Alongside career development, Celonis’ other two top HR priorities around linked with sustainability and community.

While Celonis’ efficiency-focused technology has real benefits for customer experience and employee productivity, it also has huge sustainability impacts on businesses.

It can help companies turn their environmental goals into action – “we have a lot of customers who we help to reduce their carbon emissions [by] finding where they have waste in the supply chain, logistics and so on”, notes Heinz.

Some of these customers are for profit, but others are charities, including not-for-profit Children’s Village.

This means Celonis employees can genuinely “make an impact” through their work.

Celonis is also focused on ensuring its workplace is a safe haven for employees during stressful polycrises the world is experiencing with climate change, inflation, the Ukraine war, and COVID-19.

To this end, leadership is committed to “making Celonis a place where you get a sense of belonging, a sense of community, and you feel you are included”. “One of our values is the best team wins; our founders articulate it, we actually want…people [to] really see and feel it”.

Heinz and his team want employees to feel “this is where I belong, this is where I have a home in a world that’s increasingly confusing and stressful”.

So Celonis has made huge investments to support different communities – the employer has five business resource groups (BRGs) (Women and Allies, Pride, Parents, Resilience and Black, and each has “their own budget, so they can do activities, training and come together to discuss”.

It has also hired a global head of diversity, equity and inclusion, which will be supporting on efforts like diversifying hiring process, and it has launched a Count Me In campaign on Workday.

Heinz explains: “We are very data-driven, so we wanted to understand deeper how diverse our community really is” – aka moving beyond just counting the number of women in leadership roles. So Count Me In is a global self-identification campaign where “we asked colleagues to share more about what makes them special” – there is a similar candidate Self ID initiative in the hiring process.

Given that the average age of Celonauts is early 30s, parents and families are core to Celonis’ diversity approach. “This is a very intense, fast-growing environment. We want to make sure that get the chance to start a family”, if they so choose, notes Heinz.

To help, the employer revamped its maternity and paternity policies. This moves Celonis in line with big tech, and far ahead of other sectors, with its 24 weeks full pay for primary carers and 12 weeks for the secondary carer.

But Celonis didn’t stop there. It also ensures it stays in touch with those who are on maternity and paternity leave. “We have designed a learning path in Degreed for returning parents to help prepare them as they go on leave and help re-onboard them within the Celonis ecosystem when they return” – it includes topics like work-life balance, mindfulness and stress management.

Managers are also getting more support when a team member goes on paternity leave – Celonis is developing a learning path all around team effectiveness, work transfer and helping expecting parents with heir work-life balance.

In line with the tech company’s long-term and community focus, Celonis really wants “to think generationally”; “we stand for the future and we want to create the future”.

So it has introduced equity for employees’ children – “looking at the volatility in the world, our perspective is that education will be a key differentiating factor”, but costs are very high.

So Celonis decided to act – “any Celonaut who has a newborn (through birth, surrogacy or adoption) is eligible for this education equity grant”; it is redeemable on the child’s 18th birthday.

“What better way is there to invest in the future in education?” concludes Heinz.

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