Note: This file updated July 23 at 5:40 p.m. ET with an additional source confirming information and adding more details.
A significant number of employees at logistics telematics company Omnitracs and SaaS provider DealerSocket were laid off this week, two months after both companies were acquired by Solera Holdings Inc. Many other employees received 90-day notices in a massive restructuring plan by Solera, a major player in risk and asset management data and software.
A project manager at DealerSocket said more than 200 people are being laid off from his company, and that potentially up to 35% of all staff from both companies had been let go. The source also said that multiple executives were laid off.
Another source at DealerSocket that contacted FreightWaves said that the immediate total of layoffs was approximately 190, with another 160 layoffs scheduled for Oct. 22. The source said the entire C-suite — except for two sales executives from DealerSocket’s acquisition of Automate in 2020 — were let go, and that the entire technical leadership for that product as well as DealerSocket’s Inventory+ product are now gone.
“The layoffs cut deep,” the source said.
Ray Greer no longer is the CEO at Omnitracs, according to his LinkedIn profile. DealerSocket CEO Sejal Chokshi Pietrzak’s LinkedIn profile has not changed, although the source said Pietrzak was also among the layoffs. FreightWaves reached out to both but had not received a response as of Thursday evening.
Officials at all three companies either did not respond to requests for comment or were not willing to discuss details. “We decline to comment at this time,” said an Omnitracs representative.
While the number of layoffs has yet to be confirmed, Omnitracs and DealerSocket had a combined total of 2,445 employees, according to Pitchbook. If the 35% figure is accurate, then approximately 860 employees are losing their jobs. Another source said at least 25% were being laid off, which would make the total closer to 610.
On Monday, employees at both acquired companies were called into department meetings and laid off without warning by direct company officials, including Solera representatives.
“My manager … explained that they are trying to align the companies, and in doing so, they have eliminated our positions,” the former project manager at DealerSocket told FreightWaves.
“Then someone from HR at Solera talked about our options and that we would be given a severance package in the mail but gave no details as to what that would entail. They did the same thing to the sales and customer success teams.
“They just went to every team department and dropped the hammer.”
Another source indicated that tech support, engineering and operations for every produce “were hit and several were totally gutted.” The source added, “Those products are living on borrowed time; they won’t have enough bodies to manage new development and are going to work the remaining people until they quit just trying to keep the lights blinking.”
While some employees were laid off immediately, others were given 90-day notices of future separation in order to help in a “transition of knowledge” to Omnitracs and DealerSocket nearshoring sites in India.
“Someone from my team was told she had until Oct. 22 for her separation but was told no specifics other than that. They don’t have any assignments and they don’t have any projects or directions given to them,” explained the project manager.
“I heard the engineering team [at DealerSocket] was told if they were in the United States, you have 90 days before they move the engineering team outside of the U.S. to India.”
Texas-based Solera announced on May 17 that it was acquiring Omnitracs and DealerSocket, moves that the company said at the time would build upon its strategy to “minimize complexity and reduce friction at all touchpoints in the vehicle lifecycle with fully integrated intelligent technology platforms.”
Solera CEO Darko Dejanovic added that “these highly strategic acquisitions will enable us to expand into adjacent verticals and capitalize on emerging trends in our industry.”
Said Pietrzak in the press release, “We are thrilled to join the Solera team.”
On June 7, the acquisitions of Omnitracs and DealerSocket — as well as eDriving, a digital driver risk management partner — were completed.
Six weeks later, many of the employees are now looking for work.
While the project manager said he understood that these situations arise during acquisition transitions, he felt slighted by the approach taken by Solera’s leaders.
“I have been a part of this situation before, but I have never gone through something of this magnitude,” he said. “The manner in which they did the separation was brutal and they had no rhyme or reason for how they chose who would stay and it was not very sincere. It was very cold. ‘Thank you and see you later’ — without the thank you.”
All three companies are in the portfolio of Vista Equity Partners, and the relationship has been a messy one, to say the least.
Solera, at $4.8 billion in debt, was acquired by Vista Equity to go private for $6.5 billion in 2016, including debt.
Vista Equity acquired Omnitracs from Qualcomm Inc. for $800 million in 2013. Since then, there have been attempts to sell Omnitracs, which now has $900 million in debt, according to Bloomberg data.
DealerSocket was acquired by Vista Equity in 2014 for an undisclosed amount, though estimates put the figure at approximately $387 million.
Directors from Solera and DealerSocket have sued Vista Equity for allegedly steering them away from acquisitions to push off its poor-performing assets.
In 2019, Solera sued Vista, claiming it blocked an acquisition to acquire Omnitracs, and in 2020, DealerSocket sued Vista for value manipulation and shareholder oppression when attempting to acquire Auto/Mate.
Both lawsuits were settled out of court in 2019 and 2020, respectively.
In March, the three portfolio companies were rumored to be combining to be acquired by the special-purpose acquisition company Apollo Strategic Growth Capital (NYSE:APSG), with the transaction potentially valued at $15 billion.