What happened at Canonical

A tale of town halls, tears, IPOs and brutal lay-offs

We ask the person sitting across the table from us what it’s like to work at Canonical and they stare at their drink for a while contemplating the question: “Most companies purely want to make money,” says the Canonical employee, whom we’ll call ‘DeepC’ as they want to remain anonymous. “Whereas I feel, in Canonical it’s been almost like… ‘play thing’ is the wrong word, but it’s kind of like a sandbox of ideas.”

The exciting and sometimes frustrating Canonical sandbox has lost a lot of its buckets and spades in the last month. The company that financially backs the Ubuntu distribution, which is used by tens of millions of Linux users, is in the process of a massive transformation.

Growth and profitability

On April 5, Mark Shuttleworth, the millionaire founder of Canonical, announced on the company’s blog that the firm would be trimming down to focus on growth areas and all financial support for Unity, its flagship and default desktop environment, would cease. The distribution would switch back to Gnome by 18.04 LTS, the desktop that Ubuntu had dropped in favour of Unity over six years ago (and it now appears that Gnome will become the desktop from 17.10 onwards).

With one swipe, Shuttleworth not only killed Unity, but the company’s whole convergence strategy involving a unified mobile phone and desktop OS (essentially, Microsoft’s Continuum but better) and with it at least six years of work and tens of millions of pounds in investment.

The official line was a need to focus on profitability: “The choice, ultimately, is to invest in the areas which are contributing to the growth of the company,” said Shuttleworth. “Those are Ubuntu itself, for desktops, servers and VMs, our cloud infrastructure products (OpenStack and Kubernetes) our cloud operations capabilities (MAAS, LXD, Juju, BootStack), and our IoT story in snaps and Ubuntu Core.”

IPO iceberg

But Canonical’s sudden U-turn on Unity is the tip of a rather large iceberg that has ploughed through departments dumping staff in its path, and this hulking chunk of ice has ‘IPO’ chiselled on its side. Based on performance-related shares that were being offered to the remaining staff by Shuttleworth (we’ll come back to that later), we’d also estimate that the IPO is slated for four years’ time.

To get to IPO, the company has decided to seek outside investment, as revealed by the Register, so within two days of the blog post, Canonical managed to run town halls explaining its IPO ambitions to staff scattered across the globe (the company has many remote workers living in over 80 countries), and announcing the departure of popular CEO, Jane Silber, and the return of Shuttleworth as chief executive officer.

Jane Silber

What the corporate press release detailing Silber’s departure – which turned up the following week – didn’t say is that Silber was very upset, either by her own departure or what was about to happen to the staff. One employee described her as openly weeping while Shuttleworth awkwardly patted her back, telling Silber this was actually a step up for her.

Silber was admired by many staff and described in glowing terms by a number of them as a ‘transformational leader’. She will take a seat on the Canonical board after a three-month handover period.

Within hours of the town hall meetings, a list of affected departments was sent out indicating that roughly a hundred employees were potentially at risk of redundancy – and then the contract terminations started. Some details of the redundancies have leaked out to various news sites and while Canonical itself hasn’t been that forthcoming, its own actions have created quite a leaky boat.

Word from the ground

TechRadar Pro was contacted by employees concerned that what was happening to them should become known outside of the company, and we corresponded with a number of Canonical employees who spoke under a condition of anonymity. 

“It was clear to all my colleagues for quite some time,” said one employee. “People were leaving Canonical already and everybody expected some adjustments around April.”

But as another employee commented: “Nobody expected the adjustment to be as brutal.”

A flurry of 5-10 minute video calls began on Monday 11 April and by Tuesday evening roughly 40 contractors were fired across the globe, or “dumped” like “chattel” as one staff member described it.  Subsequently, TechRadar Pro has seen data, dated around this time, confirming that at least 83 staff members were affected in this initial stage with 29 employees already fired, one resigning and 53 waiting to hear their fate. 

Contractors in the US experienced possibly the harshest terminations: a number describe being told not only that their sign-ins wouldn’t work that same day, but their health insurance coverage would be cut off, too. One employer described how they had to scramble to cancel medical treatment that they could no longer afford to have. “I was treated like a criminal,” said one particularly unhappy staff member, while some contractors who had worked for the company for over 10 years were given two weeks’ notice.

What was particularly upsetting for one staff member was the prospect of losing their bonus. Canonical has an annual performance evaluation period in April. This is the time when all employees have discussions with their managers and their bonuses are calculated, which can be up to 10% of a person’s salary. “That process was pushed to May just few weeks ago... now we all know why,” said the employee.

We need to state at this point that all the redundancies and terminations were performed according to the employment laws of each country involved, but Canonical is a company that likes to describe itself as a ‘big family’, and family don’t tend to act like this unless you’re the Borgias, or as one employee put it: “This is not how you treat your friends who helped you in their free time, who sacrificed valuable family time for you and for your projects.”