CEOs Are Leaving CX Companies: A Short-Term Trend or the New Normal?

Since the start of 2024, CEO departures have hit the CX Today headlines over and over again.

AWS, NICE, Freshworks, Twilio, Vonage, Medallia, Calabrio, Luware… the list just seems to be getting longer and longer.

That begs the question: is something unsettling the leaders at top CX tech firms?

As most CX articles now do, let’s start by considering the impact of AI.

During a LinkedIn Live video, Dave Michaels, Lead Analyst at TalkingPointz.com, discussed AI’s disruptive influence on the enterprise communications market.

AI has been so explosive in our space… we’re seeing crazy shifts in what companies are willing to invest in, with layoffs on one side of a company and investment and hiring on another.

“Then, there are other crazy shifts in valuations and what’s going on in Wall Street.”

Perhaps the best example is at Freshworks, with the CRM provider’s stock plummeting 27 percent after an analyst noted that generative AI adoption may lead to seat compression.

That analyst note came shortly after Girish Mathrubootham vacated the CEO post, 14 years after the founding the company.

Michels continued: “AI is changing everything. Some of these executives see a great opportunity; maybe they want to go off and start an AI company. But, others may have some uncertainty and doubt over the track that they are on.”

Also, investors may have unrealistic expectations about AI’s short-term impact on the space. That could drive a disconnect between them, the board, and the CEO.

Yet, perhaps the CEO departures are about more than just AI. Indeed, as the following other potential drivers suggest, a perfect storm is brewing.

A Pandemic Hangover?

Many current CEOs steered the ship through the waves of COVID-induced disruption.

At first, most communications vendors’ businesses boomed, with many customers shifting to the cloud to enable remote work.

That boom brought several new capacity challenges. But the following comedown hit harder, with stocks plunging across the CX space, even impacting stalwarts like Salesforce, HubSpot, and Adobe.

While many vendors – like the three above – have got the ships back pointing in the right direction, many others haven’t. That led David Danto, an Independent Industry Analyst at TechPerspectives.info, to make the following sorry statement during the LinkedIn Live session:

I think a lot of them just don’t believe it’s going to get any better at this point.

Moreover, even at vendors that have bounced back well, the tumultuous period may have brought on a sense of leadership fatigue, as is likely the case at NICE.

Layoffs and Broken Trust

Over the past 18 months, several of the biggest revenue-driving CX companies have reinvested money and have laid off workers en masse.

According to Danto: “The result of that is the stocks are going up, and – in some cases – the CFOs who helped make the decisions are cashing out and leaving.

There’s a break there that needs to be fixed legislatively, and – in the current political maelstrom – nobody is going to fix anything any time soon.

Yet, beyond that, the pattern of layoffs has likely broken the trust of many employees.

After all, some of the most highly regarded big tech firms – which people really wanted to work for -have started firing people at midnight with an email.

That disconnect may be seeping into the culture of many businesses, creating further uncertainty and invoking changes at the top.

Other Possible Drivers

Alongside the potential drivers above, consider the new pressures execs have to handle.

For instance, there’s high inflation, geopolitical tensions, and supply chain fragility – and none of these issues are likely to improve any time soon.

With these long-term factors also contributing to that “perfect storm”, it’s possible that the high CEO turnover isn’t a concerning trend. Instead, it may be the new normal.

Of course, that’s a worry for many businesses, but there is one possible upside: high exec turnover may pull new people into the CX space.

There, c-suite personnel typically bounce between the same old players. Yet, with new people come fresh ideas that – ultimately – the CX industry may benefit from.

A Problem That Extends Beyond CEOs

While CEO transitions may make the headlines, it’s crucial to note that many other employees are also leaving CX tech firms.

Indeed, earlier this year, Blue Beyond Consulting found that 72 percent of tech workers may quit their jobs, with culture concerns on the rise.

Some of their worries center around diminishing perks and benefits, especially in big tech. Yet, interestingly, others relate to the reasons why CEOs are quitting.

Of course, the layoffs are creating a sense of instability throughout the industry, with some feeling insecure about their job prospects. That has prompted some staff to pursue more stable opportunities.

Yet, also consider AI and how it’s overshadowing other areas of innovation. According to one BBC article, that trend has left many employees feeling uninspired and disenchanted.

As such, while AI may promise to transform customer experiences, the brands hellbent on delivering that AI may wish to consider how their efforts impact staff at every level of the business.

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