Ideo lays off 125 employees and closes offices in Munich and Tokyo
Design powerhouse Ideo has been facing a series of challenges, which have led to significant staff layoffs and the closure of some of its offices.
Ideo has been known for its innovative design thinking approach, but as the demand for such services has declined, the company has had to adapt.
The company’s CEO, Derek Robson, made the announcement in a global meeting on October. Ideo is set to lay off around 125 employees by the end of the year, amounting to about 25% of its global workforce. This comes as the second round of layoffs in 2023, with a total reduction of 32% in headcount for the year. The affected employees will receive appropriate severance packages.
In addition to the layoffs, Ideo is closing its offices in Munich and Tokyo and downsizing in several U.S. locations, London, and Shanghai. Although the company didn’t make a public announcement about the layoffs, the news spread through social media and employment websites.
Ideo, a design firm founded in 1991, has been an industry leader for several decades, working with prominent clients like Apple, Coca-Cola and Airbnb. However, in recent years, the company’s revenue has declined significantly, partly due to the pandemic and changing market dynamics. The widespread adoption of design thinking, which Ideo helped popularize, has also reduced the demand for their services.
Ideo is now looking to focus on emerging technologies and expanding its presence in the Global South, particularly Africa. However, these shifts come with their own set of challenges. Ideo lacks expertise in emerging technologies like AI, making it difficult to compete with industry giants like Google. Furthermore, the company’s traditional business consultancy is more profitable than these new ventures.
One surprising move is the closure of Ideo’s profitable Tokyo office, which has strong employee protection laws. Officially, Ideo claims they are restructuring in Japan to focus on supporting a venture capital firm called Design for Ventures (D4V), but the situation remains somewhat unclear.
As Ideo moves forward, its practice is expected to change. They will focus on their “Hubs” in the U.S., and their model will shift towards assembling project teams from freelancers, former Ideo employees, and external partners. There is also a strategic shift towards becoming a media agency, potentially advising CEOs and exploring new sources of revenue.
