Omnitracs’ layoffs and product concerns are nothing new, source says

They explained that it was a part of Vista Equity Partners’ overall strategy to sell the company.

“They have been trying to sell Omnitracs and have been very focused on profits. At one point there were talks with Goldman Sachs that didn’t go through because they just wanted more money than Goldman was willing to pay. … Continuously being in talks with someone to try to sell has been a trend,” they said.

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To be more attractive to sellers, the Dallas, Texas-based telematics company began a nearshoring strategy shortly after.

“This is how the whole nearshoring strategy to Mexico began,” the source said. “The layoffs are focused on getting rid of the high-paying engineers, who are then asked to perform knowledge transfers to lower-paying engineers who work at what they call the center of excellence and try to deliver whatever objectives the business has.”

Since Solera acquired Omnitracs in May, the layoff tactics have become more aggressive.

Related article: Updated: Massive layoffs hit Omnitracs and DealerSocket

“The layoffs last week were very different from how Omnitracs usually handled layoffs,” they said. “We usually would do them one on one to protect their identity and would try to lay them off at the beginning of the month so they at least had benefits until the end of the month.”

Now, there are even rumors that Solera will be shutting down those nearshoring efforts, including the closing of the Omnitracs’ headquarters in Dallas on July 23. 

“I think Solera is also considering closing the new office in Mexico City that Omnitracs had invested in, … the Dallas office is closed but they plan to sublease it,” they said.

The culture has become toxic for those still employed at Omnitracs, the source said.

“If you survived the first round, you are pretty much going to be here for a little bit before there are more layoffs. Until then, they are going to try to work those that are still here as much as possible until they decide to leave themselves,” they said of the employees who got Oct. 22 notices so they could train others.

Executive employees have not been exempt. While they could not comment on the status of DealerSocket’s CEO Sejal Pietrzak, they explained that former Omnitracs CEO Ray Greer exited the company earlier this month as part of the acquisition.

Some executives have followed suit, either quitting or putting in their notices, with a possibility that many will file lawsuits against Solera for not following executive terms from the acquisition, according to the source.

“We do not have any comments at this time,” said an Omnitracs representative when contacted by FreightWaves. Officials at Solera and DealerSocket have not responded to requests for comment by publishing time.

Product quality concerns

During this time of organizational change, the Omnitracs employee expressed concern about the quality of products and overall customer service coming from Omnitracs and DealerSocket, which have also begun offshoring efforts in India, according to sources.

“The Indian facility is mostly a call center. Those employees are watching truck safety videos all day every day and are not technically skilled workers,” they said. “Mexico is where they are trying to find engineers and they are not as skilled as someone here in the States.”

Between the engineers performing their transfers of knowledge and the lack of comparatively skilled engineers in Mexico, product deadlines are not being met, an issue that has been plaguing the company for a few years now.

“We were working with Kenan Advantage Group for OmnitracsOne and had agreements for the software to be done by a certain time and Omnitracs was not able to deliver,” they explained. “That has continued and leadership is giving them unrealistic expectations with unrealistic deadlines. … Now we are understaffed and have laid off a couple of people that have really key, historical knowledge of the products.”

Representatives of Kenan Advantage Group did not respond to FreightWaves’ requests for comment.

“I think it’s great that they are offering these jobs to others in different countries, but it has become a really toxic strategy,” they said.

If you have a story to share, please contact gsharkey@www.freightwaves.com. 

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