In September 2021, online coding school Treehouse laid off close to 90% of its staff without severance pay.
As a Treehouse insider, I’ve received numerous questions about what happened from students, colleagues, and community partners. In the interest of honesty and transparency, I’ve created a document of frequently asked questions regarding the layoffs. Note that the majority of the details here have been covered already in places like The Oregonian, Business Insider, and on Twitter. I’ve included relevant links wherever possible.
There are a lot of coding schools to choose from, and a lot of companies to do business with, many of whom treat their employees ethically. I hope this list of questions and answers is useful to anyone considering doing business with Treehouse or its CEO, Ryan Carson, in the future.
Describe your mindset when August 2021 began.
We were working hard, serving students, launching new content. Internally, we had formed a new Career Center squad with representatives of various Treehouse teams (Teaching, Human Resources, Student Success, Engineering, Equity Diversity & Inclusion) to improve Treehouse’s professional development curriculum. Feedback from students was positive, and NPS satisfaction scores remained well above industry standard.
Did business seem healthy?
Techdegree enrollment numbers in 2021 had declined versus 2020, which I attribute at least partially to the world starting to open back up after the worst months of COVID-19. But nothing indicated a crisis was coming.
Hadn’t Treehouse expanded recently?
Treehouse added new hires across almost every department over the first half of 2021. Under the leadership of our Chief Learning and Operations Officer, we had also launched a new scholarship program in the spring of 2021 aimed at diversifying tech called Ubora Academy.
Were you surprised by the announcement Treehouse was for sale?
Very. I later learned this had been communicated in advance to department managers, but I had no idea.
How was this news communicated?
Treehouse CEO Ryan Carson posted a video to Slack on August 13 claiming that, at our current trajectory, we were due to run out of cash by November 2022.
The video began with Ryan mentioning he wanted to move his family closer to the ocean and go sailing, which felt bizarre and irrelevant. But the impending company sale was framed as a positive change, allowing us to hire more employees and reach goals unavailable previously due to budgetary constraints.
“Move his family”. Is this a reference to Carson selling his mansion?
Correct. As noted in The Oregonian, Carson sold a mansion in Portland’s Irvington neighborhood for over $3.2 million dollars. The home sale took place on July 30, or two weeks prior to the Slack post about selling the company.
What happened next?
No immediate changes. Again, the sale of the company was described as a positive, no need for panic. Department managers met with team members to try to answer questions. Otherwise we continued working.
How did you learn the sale had fallen through?
On August 23, Ryan posted a five-sentence message to Slack:
But I’m curious. If the company was due to go broke in November 2022–
That’s a big “if”. No evidence was ever provided, and our Head of Finance was never given an opportunity to chime in.
Ryan spent his days obsessed over just two pieces of quantitative data–how many students enrolled each day, versus how many students unsubscribed.
Individual teams such as Education and Student Success examined qualitative data:
- Is our learning content successful?
- Are students happy?
- Are they graduating?
- Getting industry jobs?
- Recommending our program?
But Ryan simply wasn’t interested. Student graduations count as a negative on his spreadsheet, since graduating students typically unsubscribe.
I guess the ratio of students coming versus students leaving wasn’t where he wanted. But if you’re asking about the urgency or the severity of the layoffs, no justification was given.
After the August 23 announcement, did Carson follow up with any specifics about the reduction in force?
Did he check in individually with any employees?
Did he mention a plan to continue serving Treehouse’s students?
How did employees receive details about the reduction in force?
Department managers met with employees individually, although it was clear they were just offering educated guesses about Carson’s upcoming strategy. Otherwise it was up to the Director of People & Culture to post updates to Slack as they became available.
What kind of announcements?
On September 2, the Director of People & Culture announced the final workday for affected employees would be September 30. The plan was to reduce Treehouse’s 45-person staff to 5 full-time employees and a handful of part-time contractors.
On September 9, the Director of People & Culture posted an additional announcement that there would be no severance pay for departing employees.
Carson sold a mansion for over $3.2 million, but couldn’t afford to pay severance to his employees?
And Carson didn’t make these announcements himself? What was he doing in the meantime?
Based on his Instagram posts from August and September 2021? Vacationing in New York City, moving to Connecticut, buying a boat and sailing it. None of these posts show him remotely troubled by his employees’ sufferings (nor, for that matter, for those flooded by Hurricane Henri).
Carson sold a mansion for over $3.2 million, and bought a boat, but couldn’t afford to pay severance to his employees?
But this isn’t the first time Carson has drastically reduced his team without warning?
How did employees find out they were losing their job?
Unofficially? By piecing it together based on conversations with department managers.
Officially? Via email on September 23.
Did Carson ever check back in with the company?
On Monday, September 13, a document was anonymously shared on both Twitter and LinkedIn listing the names of employees impacted by the layoffs.
In response, Carson forced his Director of People & Culture to post a Slack message condemning the list. Underneath this condemnation, Carson offered to connect impacted employees with CEOs of other companies. Four days later, he posted a follow-up underneath noting that only two employees had sent DMs in response.
An employee’s post underneath Carson’s asking whether there was any plan in place to support existing students went unanswered.
Any other contact from Carson after September 13?
In the September 23 Business Insider profile on Treehouse, Carson is quoted as saying he “later reached out privately to those affected”.
In the same article Carson states “a change in Google’s search algorithm in August of 2020 reduced our organic traffic by 40%”.
First, according to documentation there was no algorithm change in August of 2020, although one occurred in December 2020.
Second, the August 13 announcement that the company was for sale never mentioned Google’s algorithm as a catalyst.
Third, as pointed out on Twitter, a change in Google’s algorithm should impact all tech schools equally, yet according to Geekwire US education tech startups raised a record $2.2 billion in 2020, and Treehouse competitor OpenSesame raised $50 million in new funding in mid-2021.
So the majority of Treehouse’s employees were never contacted individually, never thanked for their service to Treehouse’s students, and never offered severance.
Correct, although some were offered an opportunity to stay on as part-time contractors for an absurdly reduced rate. Treehouse’s excellent production staff were offered something like minimum wage.
And the employees who were retained?
They were told in late September that Treehouse would no longer cover their health insurance.
One last question: in recent years Treehouse tried to position itself as a mission-driven business, with a desire to increase diversity in tech and a commitment to EDI (equity, diversity, and inclusion.) Was that an illusion?
Not at all. Treehouse’s employees believed wholeheartedly in this mission, and this belief impacted every decision we made. At the team level, Treehouse was a warm, welcoming, supportive atmosphere, and I honestly believe each team member strived to do right by our students.
Did this belief reach the top of the company? Readers can make their own judgements based on what’s written here.
Edit: after 17 days of total silence, Carson did post one last message to Treehouse Slack as employees were saying goodbye:
Needless to say, the reaction from his employees was not a warm one, though it did mark Carson’s first mention of Treehouse’s students in months.