I tried selling my shares of Unbabel, considered one of the most innovative companies in the world. Here’s why.

Since 2016, I have been a journalist at Fumaça, an independent media project of which I am also a co-founder. Fumaça has always adopted a policy of radical transparency, not only in the journalism it practices, but also in the way the organization is managed. On several occasions I have expressed my belief that complete journalistic objectivity is impossible; nonetheless, it is the responsibility of all journalists to state their business, by clearly and transparently laying out potential conflicts of interest. I therefore feel it is my personal and professional duty to publish and circulate the letter transcribed below and sent on 28 April to Unbabel, a company of which I am a former employee and in which I have been a minority shareholder since resigning from my position, in 2018, before starting to work full-time at Fumaça. For reasons of confidentiality, certain business figures and comments made to me in private have been removed from the text of the letter.

In a written response to this email, the company refused to accept the sale of my shares.

“Vasco, João, Hugo, Wolf,

I hope you and your loved ones are well and staying safe during these critical times.

I know this is a particularly difficult moment for all of you at Unbabel but, believe me, it’s also very hard for me. I love Unbabel, I really do, and it’s with a very heavy heart that I’m writing this email, informing you of my intention to permanently end my relationship with the company and sell my shares. Let me explain why.

I remember when Vasco invited me to be part of Unbabel. I had been at the office, across the street from IST, a few weeks before, where I found no more than 10 bright young people working diligently behind their screens, committed to changing the world. It’s been 2 years since I left Unbabel, and I still have no answer: Did I think they were actually working to change the world, or was I simply falling under the spell of Vasco’s charm, strategy, and vision? I don’t know, but I knew then that I wanted to either create something similar or be part of it.

At the time, I had scheduled a coffee with Vasco to pitch him my soon-to-be revolutionary startup, which actually died before it was even born, a few weeks later. So, when my entrepreneurial aspirations subsided, Vasco asked me to join Unbabel as a sales representative, to help Sofia Pessanha acquire new customers, and build a scalable sales process. I agreed to join a few days later, but not without mentioning that 1) I had no idea how to do it, and 2) I wanted to move away from sales as soon as the process was implemented.

When I joined Unbabel in September 2015, almost 5 years ago, our team was so small that we could all fit into an office the size of T1’s patio, where Vasco would often sit next to you and ask: “What roadblocks can I help you move out of your way?” I remember how once a week, we would walk into a nearby barbecue restaurant and order a few frangos assados for the whole team; we would all cram into a van every Friday afternoon for surf classes; take over the tiniest tasca for lunch or dinner, while Bruno Silva doodled on paper napkins.

I remember the day we closed our first subscription deal, a few days after changing our price plans from pay-as-you-go into recurring payments. I remember when we had a 9$/month plan up on our website. I remember when we closed our Series A and when we moved to the Tower of Unbabel (the first of many, later renamed to T1) and having to assemble our own chairs and desks. I can still recall the adrenaline rush of closing “big” deals, the more or less constant “booms” on Slack, the late nights at the office, the frustration of missing our targets, and when I started managing a team myself. We went through a lot together and I owe one of the best periods of my life to Unbabel. It’s definitely when I learned a lot about who I am today.

When I think about those times at Unbabel, there’s a constant theme throughout the whole journey: we were all in it together. I know this sounds something of a cliché, but it really felt like family. There’s this sentence I heard Hugo Macedo recite dozens of times that perfectly describes how I looked (and still look) at Unbabel: “Organizations are not abstract entities; they are the people who are part of it.” And that’s what Unbabel has always been to me, the people who are, and were, part of it.

And that is why I strongly disagree with the decision to fire 35% of Unbabel’s workforce, causing 90 people to lose their job in the middle of a pandemic and national state of emergency, with only 2 weekdays of notice, no unemployment benefits, and, in most cases I’ve seen, a severance package far smaller than what I consider financially viable — not to mention morally acceptable — in times like these.

Last year, Unbabel announced a new round of funding of $60 million. This marked the biggest Series C in the history of the Portuguese startup ecosystem, bringing our total funding to more than $90 million. From that point onwards, the investment grew massively. Headcount increased more than it had ever grown before. […] In other words: your speculation didn’t meet reality. And I know this is literally the startup game — I’ve played it for a few years, as you know — trying to grow the company as much and as quickly as possible so, eventually, Microsoft, Apple, Google and the like will acquire it and make some of us rich.

Which leads me to my first point: no, the shitshow we were presented with at the beginning of this month was not “all about coronavirus.” Yes, I do agree that coronavirus makes things worse, but the structural problems were there all along. And so I read with great sadness Vasco’s response to the media on the night of the announcement — before the company had even let people know whether they would keep their jobs — simply using Covid-19 to explain why 35% of the team would be fired. As one of our ex-colleagues put it to me a few days ago, this has one name and one name only: covidwashing.

It’s “when shit hits the fan” that you understand what people are capable of. You had to save Unbabel in the midst of an internal and external crisis — both because of management’s bad decisions and because of the current economic climate. And I do agree that saving Unbabel was the priority. We just don’t agree on what that means.

You could have decided that saving Unbabel would mean saving the people who went on this journey with you. People that went through the ups and downs of watching directors, VPs and so many other experienced employees leave the company in 2019; who chose to stay and follow the vision and strategy and hope that everything would work out; who refused to take job offers and leave. You could have decided to enforce a hiring freeze […]; you could have decided to cut sales commissions in half and use that buffer to save a few people; you could have decided to apply pay cuts across the management and leadership teams (which were, very directly, the ones responsible for part of the crisis); you could have decided to fire people from the leadership team; you could have decided to propose a temporary pay cut for the whole company; you could have decided to let 5%, 10%, 15% of the people go; or you could have decided to get everyone together and work as hard as you can to make it work.

Instead, a small group of all-powerful “leaders” decided that the right thing to do would be to kick 90 of our employees out of the company in the middle of a state of emergency. Now, did any of our leadership-team members get punished? Was there a high-level pay cut put in place? Did anyone get fired? What does that say about you?

The whole process of communicating this to the team was nothing short of a disaster. As I had the opportunity to explain to Hugo Macedo and João Graça, my understanding is that your strategy was deeply dishonest and opaque. On the 12th of March, less than a month before the ever-so-frightening “emergency all-hands,” Vasco sent an email to the whole team saying — and I’m quoting — “even though the impact of the current climate has been felt on the global economy, we are well capitalised and continuously improving our processes to be more efficient, and so we are confident that we have the resources to absorb any possible setback.” Clearly, that sentence didn’t age very well.

When you called the emergency all-hands meeting on the 7th of April, most people wouldn’t even begin to imagine what was about to happen. I challenge you to find many former employees who would say otherwise. Maybe people wondered whether or not there would be lay-offs, or cuts in expenses, or even some people let go. But they never imagined that more than a third of the company would be shown the door — not this way. I’m not even asking you to make Unbabel a holacracy, or to involve employees in a decision of this magnitude — though, as you all know me by now, that’s what I feel is right. I’m just asking you to be transparent about the company’s financial situation, about your mistakes, and, more importantly, to tell the truth.

The decision you announced on that day is — in my opinion — the worst decision Unbabel has made in all the time I’ve known you. But what happened after that is a worker’s worst nightmare.

Not only did you push everyone to sign a deal by the 13th — only two business days after the initial announcement — but you also suggested there was no other alternative. When people asked you, during the all-hands and subsequent meetings, “What happens if we don’t sign?”, Vasco’s answer read like a thinly-veiled threat: “It’s not in your interest not to sign,” he said. When people asked you, “will we have access to unemployment benefits?”, you quickly refused that option, even though the law provides businesses with an opportunity to make this benefit available for many workers who leave by mutual agreement. Of course, nobody wanted to leave with the right to collect unemployment benefits only — that’s obviously less than your compensation package. But being registered as a job seeker has multiple advantages when it comes to applying for other kinds of subsidies (the municipal rental subsidy, for example) and can provide an economic boost to former employees looking to start their own company. Opportunities like these are extremely important at a time where we seem to be facing a global economic crisis.

[…] As I suggested to Hugo and João, in my opinion, the minimum morally reasonable compensation would hold people over until the end of September […]

You decided that 90 of the people who made Unbabel what it is today were disposable, no longer useful for your profit-driven end goal. That the abstract entity called Unbabel was more important than the people who were part of it. That your aspirations of growing this company enough to sell it for a few hundred million dollars and make a few of you rich were more important than the well being of the people who helped you get here.

But there’s a problem. We’re not a 6-people-in-a-2-bedroom-in-San-Francisco-playing-the-YC-game startup anymore. We’re now responsible for the job security of more than 250 people. Which means we have the responsibility of making sure they can live a decent life and protect their loved ones on the brink of what might be one of the major economic crises of our generation. So, instead of pushing them further into the abyss, good leadership would be to do everything in your power to solve this problem together, working with them. You picked the easy way out.

Sadly, this doesn’t stop here. While you were explaining to the team (and the press) that you were cutting costs because of the pandemic, you were welcoming a Chief Marketing Officer based out of the USA. How much does she earn? How many salaries would that be worth? I just hope that you’re not planning to hire people for her team in the near future. That would be the ultimate hypocrisy.

You obviously know by now that I’ve been helping a lot of our ex-employees who are fighting for their rights. And you probably think I’m being disloyal to a company which gave me so much. Well, I’m sorry, but I have to disagree. Helping the people who built Unbabel is exactly what being loyal to Unbabel means. Again, quoting Hugo: “Organizations are not abstract entities; they are the people who are part of them.”

The reason I’m so angry is simple: I was also part of this decision. As a shareholder, I’ve implicitly lent my name to this decision, and others like it. And that I can’t accept.

If this is the way you treat our employees, the people who helped us achieve what we did, then, I want out. I don’t want to be part of such an organization. That’s why I’m informing you today of my intention to sell the shares I acquired by exercising the stock options offered to me when I joined Unbabel. I don’t want to get rich off of other people’s suffering. So I’m asking you to please consider buying them at their current value so I have a way out. Let me know if Unbabel is OK with that.

Looking forward to your answer.

Note: As a matter of transparency and journalistic integrity, I would like to inform you of my intention to disclose the contents of this letter online, next week. Please let me know if it contains any information you should deem confidential and the reasons for such confidentiality.

Thanks in advance,

Ricardo Esteves Ribeiro.”