Every story has a villain. In the ongoing story of layoffs at Autodesk, a new villain is emerging: the activist investor.
[Updated March 12, 205 with Starboard’s calls to replace Autodesk CEO]
[Updated March 11, 2025 with CNBC interview with Andrew Anagnost]
Decimate (verb): the brutal practice of the army of ancient Rome where a unit found guilty of a severe crime (such as mutiny) was punished by having it execute every tenth man. Decimare means “ten,” also the origin of decimal and decade.
In business, as in war, decimation again raises its ugly head. But whereas the winds of war preceded its destruction, in business, destruction strikes at lightning speed. Such was the case with Autodesk, which recently announced that it was going to lay off 1,350 employees, about 9% of its 14,000 worldwide total.
But We Are Doing So Well
The layoffs were a surprise to all affected. Autodesk had just posted a great 4th quarter and a great year. Revenue was up 12% for the quarter and the year. The company posted record revenue ($6.1 billion) in FY2025. Profits surged to $1.1 billion (18% of revenue). It was about as good as it gets for Autodesk.
Why would a company lay off after what, by all accounts, would appear to be a windfall year? Could it be the beginning of the feared AI-cost-me-my-job storm? A ruthless trim-the-fat move, expected in companies acquired by private equity firms? But Autodesk had not been acquired and was still very much the master of its domain. Or was it part of the cyclical nature of tech, an industry prone to creative job titles and descriptions in the best of times. Really, who ever heard of a tech evangelist before?
Employees were completely caught off guard by the recent layoff notice.
“The hardest part of a layoff is its suddenness. In an instant, no prior warning, unrelated to job performance, you’re severed,” said Jason B. Love from Autodesk’s PR team in a LinkedIn post.
“It’s not how I imagined leaving,” says Darren Brooker, Narrative Director at Autodesk, also on LinkedIn.
CEO Andrew Anagnost announced the layoffs in a message posted on the company’s website. Parts of it were read out loud by Neil Cross on YouTube in an episode entitled “Ask me again why I never joined Autodesk.” Cross does not expect Autodesk’s UK employees to be affected due to the country’s labor laws but sympathizes with U.S. employees who face a “savage” predicament. California, Autodesk’s home state, is a right-to-work state — a euphemism for a right-to-fire.
I have seen some of Autodesk’s most ardent and faithful supporters get let go over the years. Casualties include Lynn Allen, who enthralled thousands at Autodesk University from the main stage and hundreds in her classes. Shaan Hurley was let go after 25 years of leading user groups. Shaan maintained an Autodesk museum of sorts full of company memorabilia. Both should have been inducted into a company Hall of Fame — if only there had been one — and had their numbers retired, not unceremoniously put out on the street.
Bay Area’s Mass Grave
The Bay Area is reeling from job losses. HP announced an additional 2,000 layoffs, bringing to about 9,000 the reduction in workforce since 2022. Cruise, the robotaxi company started by GM, announced it is shutting down operations and laying off about 1,000 people, many of them in the Bay Area, according to TechCrunch.
The biggest expense for a software company the size of Autodesk is salaries. Labor can be as much as 80% of the cost or creating software. While Autodesk’s headquarters in San Francisco gives the company access to tech talent, it is also where the talent is the most expensive. So, it is no surprise that the Bay Area would be the hardest hit by the 2025 layoffs. A total of 289 employees at the Market Street office will be losing their jobs. Autodesk says the reason for the layoffs is strategic restructuring that aims to A) reshape itself into a direct-to-customer sales company (from a sell-to-reseller company), B) make greater investments in AI and cloud technology, and C) get lean.
Was AI the Bad Guy?
Autodesk gives AI as a reason for the layoffs and, at the same time, recognizes AI is its future. Autodesk will not state specific job categories or departments at risk. A casual search on LinkedIn and Glassdoor reveals no preponderance of type or pattern among recent Autodesk users who have declared themselves available for work.
It may be reasonable to think that developers would be the most affected. ChatGPT is, after all, really good at writing code. There is a rumor that ChatGPT has passed the infamous Google programming test. However, Autodesk is, at its heart, a software development company. When a company is cutting the fat, it makes more sense to target departments that are on the periphery or have been added in the last few years.
A Bloody Cycle
A quick look at the last 16 years reveals a 5-7 year pattern of layoffs at Autodesk. Autodesk had a big layoff in 2009, two in 2016/2017, skipped the early 2020s (deference to COVID, perhaps), and then started again in 2025.
- January 2009: The company implemented a workforce reduction of 5% in response to economic challenges during that period.
- January 2016: Autodesk announced 925 layoffs, approximately 10% of its total employees, as part of its “transition to the cloud and subscription business.”
- November 2017: The company reduced its workforce by 1,150, about 13%, to streamline operations and shift towards a subscription-based business model.
“Companies do this every few years. They make too many jobs and then they have to let them go,” says Oleg Shilovitsky on a Masters of Technology Happy Hour. Oleg was an Autodesk employee after his company was acquired but left on his own volition to form OpenBOM.
The 2016 Massacre
The two-year period starting in January of 2016 was the bloodiest in Autodesk’s history. Its origin bears examination. In 2016, Autodesk was led by Carl Bass, and Bass was embroiled in battles with activist investors. Hitherto, Bass had firmly established a reputation as a “product guy,” a welcome departure from the company’s former leadership that leaned towards sales and marketing. Under Bass, the company weathered the recession and increased its annual revenue by a billion dollars. The Bass era was Autodesk’s Golden Age.
Autodesk’s activist investors thought the company could do better. Two of them (Sachem Head Capital and Eminence Capital) had garnered an 11.5% stake in Autodesk, sitting on the board of directors, and were in a position to affect change.
Bass was clearly not a fan of activist investors. He referred to them as a deviant and extreme form of capitalism. But it was not a war Bass would win. In February 2017, he turned in his resignation.
New Era, Same Pressure
Taking over Autodesk from Carl Bass were co-CEOs Andrew Anagnost and Amar Hanspal, with Anagnost becoming the sole CEO in June 2017.
Investor pressure was unrelenting. Seven months after Anagnost became sole CEO, the company’s biggest layoff to date in numbers (1,150) and percentage (13%). In less than two years, Autodesk had reduced its workforce by over 20%.
Skip forward to now. Andrew Anagnost takes full responsibility for the 2025 massacre. It was an act of the “office of the CEO” and not the result of “third-party pressure.”
It was an odd statement to make. A CEO is usually accountable, right? I hadn’t suspected a third party — until I read that.
The CEO doth protest too much, methinks. Was this Shakespeare’s Player Queen in Hamlet who says she loves the King and will never remarry, raising the question of foul play that no one suspected?
The third party was a reference to pressure from investors, including activist Starboard Value LP, which has been a thorn in the side of Autodesk for some time.
In a scathing review of Autodesk’s financial performance issued in August 6, 2024, Starboard mentions Andrew Anagnost by name and calls for his head with their first point:
- “Re-evaluating the CEO – Autodesk’s Board must objectively assess Mr. Anagnost’s performance as CEO and determine whether he is the best choice to continue to lead the Company.”
Starboard was to reiterate the demand to replace Anagnost a couple of weeks later (August 22, 2024) when it alleged that Autodesk’s leadership had misled shareholders while attempting to meet “certain financial targets.”
In a letter to Autodesk’s CFO Stacy Smith dated June 25, 2024, Starboard’s Managing Member Jeffrey Smith calls out Autodesk for “years of underperformance” and suggests that “the largest opportunity to reduce costs lies within the Company’s sales and marketing organization, where Autodesk spends considerably more as a percentage of revenue than its peers.”
After activists investors had been successful in pressuring Carl Bass to resign, who could fault Anagnost for being worried about his position. Anagnost appeared on CNBC immediately after the recent layoff announcement. He was quick to deny that layoffs were ordered to increase operating margins but for gaining “efficiencies” in marketing and sales. He insisted that that had been the plan all along. Asked about the ongoing feud with Starboard, Anagnost said that he talked to all investors [not just activist investors]. He was to echo Starboard’s suggestion to reduce sales and marketing costs multiple times — as if pleading his case directly to Starboard.
Marketing: Problem or Solution?
There is absolutely no question that Autodesk spends more on marketing than any of its competitors. However, whereas activist investors see it as an outsized expense, CAD insiders see Autodesk sales and marketing as its advantage. Since its inception, Autodesk has believed not so much in cutting-edge software as in software being of good value. The company’s early motto was “80% of the functionality at 20% of the cost.” That was good enough to make the software fly off the shelves — until it didn’t. Then came Carol Bartz to make Autodesk a billion-dollar company, not with cutting-edge software but with sales and marketing. In fact, it was during the Bartz era that Autodesk released its biggest software flop (AutoCAD R13).
While Autodesk technology improved in the Bass and Anagnost eras, the company still makes most of its revenue from last-generation software (AutoCAD, Inventor and Revit). This can only be explained by the company’s sales and marketing prowess. Let’s face it: Autodesk’s sales and marketing are, without a doubt, the biggest factors in Autodesk’s success. Without them, who knows when, if ever, the company would have passed the $6 billion mark?
It wouldn’t be the first time activist investors got it wrong. In a March 2016 Wall Street Journal interview, Carl Bass compared activist investors to sportscasters who think they can coach a team. They are looking at the player stats to see who had a good or bad season.
Investors Behaving Badly
Posting record revenue for the year is apparently not good enough when the revenue doesn’t flow into your pocket.
The “activist” in activist investor may invoke images of protesting hippies with placards. Active investors would be a more fitting term.
Any stockholder has a right to be heard. That’s kinda the law. However, activist investors are a world apart. They are in the habit of buying a lot of shares in a publicly traded company and then feeling entitled to affect its operations. Passive investors, the regular kind, wait for dividends and increases in share prices.
Activist investors will complain long and loud: the company is undervalued, executives are getting too rich, the board of directors is too weak, etc. They are not above posting open letters on their websites berating executives and board members.
It may be reprehensible behavior, mysteriously tolerated, but the outcome can be severe — as Autodesk employees in 2016/2016 and 2025 would experience.
Starboard Ho!
Starboard Value has been a particularly painful thorn in Autodesk’s side over the years. Starboard’s holds $500 million in Autodesk stock. With Autodesk valued at $50 billion, Starboard’s stake is a mere 1%. Yet, it still manages to wreak havoc.
Company executives, the ones that survive, begrudgingly admit that activist investors can drive positive reforms but are, for the most part, viewed as unwelcome know-it-alls that cannot be thrown out. It’s like your drunk uncle at the Thanksgiving table. He doesn’t have to be right; he only has to argue louder.
Encouraging Bad Behavior
Ironically, despite a cycle of vicious layoffs, Autodesk still managed to appear on “Best Place to Work for Innovators in 2023” by Fast Company. The company was 15th on Glassdoor’s Best Places to Work in 2025 and made Forbes’ World’s Best Employers in 2024, which highlighted “its commitment to employee satisfaction and workplace excellence.”
We will see how this plays out in the theater of the design software business. We have seen an ominous request from an activist investor to trim sales and marketing followed by a CEOs taking action and accepting responsibility. We have to wonder who is really in charge. Honestly, if I was anybody but an AI developer, I would be quite insecure. After reading the Starboard missive, I think those in sales and marketing positions have the most to worry about.
We could blame corporate greed in general and CEO specifically for plant closings and ruthless layoffs in the past, but recently, the entire concept of job security has been turned on its head. Elon Musk acquired Twitter and laid off 80% of its workforce and has been rewarded by being named head of the U.S. DOGE (Department of Government Efficiency). Musk is bent on applying the same ruthless tactics at Twitter to U.S. federal government workers, who once enjoyed ironclad job security.
In a previous generation, corporations were menaced by corporate raiders and hostile takeovers. More recently, a trend has emerged of private equity firms acquiring companies only to ruthlessly cut costs, all for the purpose of increasing short-term profit and often at the expense of long-term viability.
Like it or not, even the most ruthless CEO acted legally, at least according to corporate by-laws, with the leadership granted by their position.
What we may have, with Autodesk’s 9% reduction in workforce, is ruthless cost-cutting not by leadership or the collective voice of the stockholder, but by complaints of a few overprivileged and overentitled stockholders that have one clear motive: enriching themselves. Allowing certain stockholders extraordinary voting rights subverts the spirit of corporations, which were created to allow every stockholder to have an equal say. Giving activist investors extraordinary rights and seats on the board while others have no say in the company’s affairs is part of the problem of power concentrating in the hands of a few. Trying to appease activist investors by granting their requests not only emboldens them but also provides an example for other big investors that had hitherto been content to let the coaches call the game.
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This article has been corrected, expanded and republished from its original version on LinkedIn.