EnerNOC to lay off 15% of workforce

Dive Brief:

EnerNOC last week announced a plan to restructure its subscription-based energy intelligence software (EIS) to focus more on select industry segments and "high potential customers," a decision which will result in laying off 15% of the company's global workforce, Greentech Media reports.
The company said it remains confident in the long-term outlook for the EIS market, but said the decision would materially reduce its operating expenses as the company shifted away from a strategy of broad market development.
The announcement comes about three months after EnerNOC decided to s ell its utility customer engagement business, reducing its North American workforce by about 5%.

Dive Insight:

Demand response leader EnerNOC has been around 15 years, and its announcement last week represents the company's largest workforce reduction in its history. It also comes just months after EnerNOC decided to sell its segment aimed at helping utilities engage industrial customers.

While demand management is growing as a way to keep rates lower and meet environmental mandates, third party providers are facing more competition as consolidation is taking place. In the second quarter, tech giant Oracle announced a deal to buy Opower, a major provider of cloud-based energy efficiency and customer engagement software to utilities.

EnerNOC said its most recent move will allow the company to refine its focus to select industry segments with greater potential. Chairman and CEO Tim Healy said the decision represents a strategic shift, following product-related acquisitions over the last several years.

"We are experiencing traction within a few key industries and with dozens of progressive enterprises that are ahead of their peers on the energy management maturity curve," Healy said in a statement.

He added that consumption and sustainability mandates will continue to drive growth in demand management solutions, but "that said, we are restructuring our subscription software business to focus on those customers who are ready to buy in the near-term."

The company said it would release additional details related to the restructuring in its third quarter earnings statement, and added it is reaffirming its previously issued third quarter and full-year financial guidance. EnerNOC previously said it expected Q3 revenues from $141 million to $161 million, with $16 million to $19 million of that coming from software. The bulk of the company's revenues come from demand response.