Quark Responds to ‘Quark Insider’

2007
Aug
09

Sunday, a Quark insider alleged layoffs, fiscal irresponsibility, and slumping sales. Wednesday Quark responded. I spoke with Ray Schiavone, president and CEO of Quark, about recent layoffs in the U.S. and India, about the state of Quark’s finances, and about whether QuarkXPress 7 is selling.

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Sunday, 5 August 2007, Quark VS InDesign.com published the story “Quark Insider: Sales Low, Spending Up, Employees Out.” The story presented allegations leveled at Quark by a highly placed Quark employee whom we dubbed simply the “Source.” The story instantly sparked heated discussion from those within Quark as well as without. The following Monday morning, Quark’s director of corporate communications, MacLean Guthrie, told Quark VS InDesign.com to expect an immediate official response to the story. She also requested that we interview Quarks’ CEO. Three days after I called for a statement, interrupting an office full of people discussing the “Quark Insider” story and how to respond to it, those people were ready to respond.

Layoffs?

The Source in the “Quark Insider” story asserted that a “significant” number of employees were dismissed from Quark on Friday, 3 August 2007–many notified by e-mail directly from Schiavone himself, and some escorted from the downtown Denver Quark building. The terminations were not made known to other Quark employees; only senior executives and dismissed employees’ direct supervisors knew, the Source said.

Schiavone says there were no layoffs on Friday.

Instead, they happened Monday and Tuesday. One employee was terminated the preceding Wednesday–August 1st–for unrelated reasons, but Quark says the layoffs in question just didn’t happen until earlier this week. When asked to explain how the fact of layoffs that didn’t occur until Monday and Tuesday could be published on the preceding Sunday, both the Source and Quark declined to comment.

Schiavone also says the terminations didn’t happen as the Source reported. “Not a single person got an e-mail from me notifying them of a layoff. And escorting people from the building… That isn’t me. That isn’t how I do things.” In several instances, an employee’s manager and an HR representative flew to the employee’s remote office to talk personally about the decision.

Whenever notifications and layoffs actually occurred, what were the numbers involved? How many people were dismissed? A “nominal percentage; not substantial,” Schiavone says. “As far from substantial as you can imagine. Any more than one is not fun, and it’s not something I take lightly, because I know we’re impacting families.” He will not provide an exact number of people let go, nor a count of personnel still employed by Quark offices worldwide.

The Source claimed that the majority of the discharged employees in the US were “luxury personnel” from sales, marketing, and other customer facing departments. Schiavone says that all departments were impacted and “no one department was affected more than another.” Quark is “investing in our customer facing resources,” he adds. Well, then how does Quark define the term “luxury personnel”? “I’ve never heard that term before,” he says.

So who was affected by the layoffs? Again, no exact numbers and no names are given. In the US, most of the changes are happening at the top. Schiavone came on board in November 2006, and immediately set to work making personnel changes one Quark employee characterized as “cleaning house.” Eighty-one positions have been created or filled since January 2007, and 60 percent of the current management team is made up of new positions and new hires since January 2007. The layoffs of the last few days create “a heck of a lot more change at the top than in the ranks by an order of magnitude,” Schiavone explains. “While some positions were eliminated, many employees are transitioning into new product lines.” And, Quark is hiring. Resumes are being entertained to fill newly created positions. Quark has retained an executive talent search agency, to assist in filling out the New Quark team.

In Mohali, Punjab Province, India, where an unspecified percentage of the company’s Quark City staff were dismissed concurrent with the US layoffs, the reason is different. “In India we were more focused on performance. We were focused on taking out the bottom performers,” Schiavone explains.

However they’re handled, layoffs inevitably inspire retained employees to fear for their own jobs. One Quark employee still with the company as of Wednesday asks not to be identified but sums up a common sentiment: “It’s a shock when someone you worked with for years suddenly isn’t going to show up for work ever again. You can’t not wonder if your own resume is up to date.”

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