Xsolla founder on employee ratings and layoffs: "It's a scary story that sells well"

Alexander Agapitov gave an interview to Medusa about the scandal with the reduction of 150 people. The founder of Xsolla told how the employee performance assessment system works, and what he thinks about criticism of himself. He also explained why he does not consider the incident to be dismissals and is not afraid of inspections against the company.How does the employee evaluation system work?

Xsolla spied this idea from Netflix and Harvard, which regularly dismiss 10% of the most inefficient employees.

• However, the company did not plan cuts until it showed growth of 40%.“That is, the rating has been since the beginning of the year.
• He was and will always be now, and maybe people will look at him a little differently now,” Agapitov noted.Xsolla determines efficiency by 30 parameters.
• Among them are writing and reading articles in the company’s internal Wikipedia, creating and closing tickets, as well as being active in dashboards and at internal meetings.Employees are evaluated on a 100-point scale.
• “My team just weighed [these parameters], took into account that people have different concepts of norms in different departments and different roles, and sorted the rating,” Agapitov explained.In his opinion, texts are much more effective than presentations, and it is extremely important to read information in the internal Wikipedia about business and other companies.
• “Here are people who didn’t really want to learn something new, to understand the company’s plans – they were offered a generous severance package,” he stressed.Agapitov separately stated that Xsolla only monitors the logs of work platforms, and does not check whether employees are engaged in personal matters during working hours.
• Based on this, the effectiveness was determined.The founder of Xsolla believes that all employees (even baristas) should be interested in the company they work for.
• If a person leaves an invisible digital footprint, it should be replaced.”If I have 50 managers, then I have a chance to evaluate them, talk to them, sort them out.
• And if you need to evaluate 500 people, then jewelry work will not work. This is the disadvantage of this method and the imperfection of this approach,” Agapitov believes.The company also plans to introduce a “digital mirror”.
• It will allow employees to find out how the machine evaluates them. However, until recently, the development team did not share the enthusiasm for creating such a tool.Why did the layoffs happen right now?

Xsolla estimates revenue twice a week, comparing the figures month to month.

• According to Agapitov, the company stopped showing the same growth of 40% within six months.Last year, Xsolla’s revenue grew by 80% amid lockdowns and a pandemic.
• However, now the growth has slowed down, as it has become much more difficult to attract new customers — including due to the lack of offline events.”Business partners from the USA have not shown themselves so effectively at virtual exhibitions in Europe and Asia, it is inconvenient for them.
• I attribute the global slowdown of the product to this,” Agapitov explained.More about abbreviations

He stressed that 150 dismissed employees — although a third of the entire staff in quantitative terms, but only 10% of the budget of the entire company.

• “The rating does not take into account salaries, but when I choose the bottom 10%, I stretch [the choice] until the amount of salaries is equal to 10% of the budget. That is, it is necessary to reduce 10% of the budget, not 10% of employees,” Agapitov explained.Most of all, it affected the employees of the Perm office.
• In the USA, six people were fired, and in Asia — only two.Specialists in various fields have been reduced.
• “The worst programmers, the worst marketers, the worst office managers, the worst admins, even the worst accountants,” Agapitov explained.Xsolla plans to cut 10% of the budget every 12 months in case of slow growth.
• Now the company is looking for new employees in Asia and Europe to start growing again by 40% or more.Agapitov admits that his harsh statement could scare many employees and deprive them of confidence in their future.
• “I understand perfectly well that emotional intelligence is something that is hard for me, but I’m working on it,” he notes.At the same time, he is not afraid of inspections and believes that from the point of view of Russian legislation, Xsolla has not fired anyone:
• “We told all the employees — those who received the letter — that the company does not appreciate you, we will find you a better job. And with a better salary. And you are not interested in the future of Xsolla either. Here are generous vacation packages for you— good luck.”Agapitov understands that some of the remaining employees may leave because of the “hype” around Xsolla.
• However, only those people who are interested in development and growth should work in the company. Anyone, including a barista, should be interested in business and related processes.Separately, Agapitov stressed that the dismissed people were simply not interested in the industry.
• Therefore, Xsolla will give them recommendations and help them find a good job in other companies where the bar is lower.About the criticism and the scandal that happened

Agapitov believes that the hype was caused by a problem with remote work in Russia.

• Some people find it difficult to work from home and they try the situation with Xsolla on themselves.”And then I came out and said that in general artificial intelligence can fire you all, because there is enough data to do this analytics,” Agapitov explained.
• He noted that the news about the cuts in Xsolla caused fear among those people who themselves are not working effectively enough.
• According to Agapitov, he is supported by many business owners who did not dare to take such a radical step.The founder of Xsolla also stressed that his PR firm from the United States does not consider the incident a crisis: “Whatever story you tell the press, these are two stories — either fear or hope.
• But fear sells better, and this is a scary story that sells very well.”Agapitov is sure that by the standards of the USA, Xsolla has done everything “very positively”.
• He explains this by the fact that dismissals based on algorithms cannot be regarded as biased and discrimination can be considered in them: “From the point of view of American media and American civil society, this is much better and more indisputable for us than if some manager fired someone.”