EIG Announces Decision To Lay Off 440 Bluehost Employees In Utah Office

Judy| 2017-02-06 News Comments( 0 )

According to the latest news released by VentureBeat, the owner of Bluehost—Endurance International Group (also know as EIG), plans to close its Orem, Utah office and 440 accounting, human resources, customer support, and training staff will be laid off in the office from March through October of this year. The Utah office is home to Bluehost, which is one of the industry leading web hosting brands. Therefore, over half of Bluehost’s 750-person workforce will be affected in this event.

Founded in 2003 in Provo, Utah and then acquired by EIG in 2010, Bluehost is a cloud-based web solutions provider offering comprehensive tools to millions of users throughout the world. Unlike leading public cloud infrastructure providers like AWS and Google that have more data center locations around the globe, provide a wider variety of services and charge by minute or hour, Bluehost does not keep constantly renewing the equipment and strengthening the technics, and only accepts monthly or yearly billing cycles, no wonder why it has been experiencing a steady decline in customer satisfaction in the past several years. And this may also be one of big reasons that drive EIG to downsize Bluehost workforce.

Though EIG describes the move of closing the Utah office and laying off 440 people as a consolidation of web hosting support at Tempe, AZ office, people are more likely to believe that it is just a response to the large scale outages the hosting company has had over the years. With the belief of “larger, well established companies will always offer the best in quality and service”, the Massachusetts-based company has silently taken over many well-known web hosting providers in the industry, for instance, Bluehost, HostGator, iPage, Arvixe, A Small Orange, and etc. To date, EIG has acquired more than 60 web hosting brands in all. However, the results are not what the company has been always expecting. Even worse, as a result of blind expansion while lacking planning, EIG is experiencing an increasing customer churn rates.

In August 2013, an equipment failure in EIG’s Utah data center caused millions of HostMonster, Bluehost, and HostGator customers losing services. The simultaneous downtime reflects EIG’s consolidation of shared hosting services through the convergence of infrastructure into fewer data center facilities. The outage was not new especially in the cloud computing industry but, disappointingly, EIG as an experienced player failed to address single points of failure and their close relative. In the following months, the Utah data center has experienced several more outages, such as massive New Year’s Eve outage on December 31st, 2013, router issues on April 16th, 2014, and more. All these force a dissatisfied customer to leave EIG brands and go in search of a new option.

It is easy to understand why EIG made the decision to close the Utah office and cut off redundancy. Nevertheless, this is not the only office being about to experience layoffs. On January 24th, 2017, nearly 90 customer support agents in EIG’s Austin, TX office were informed to get laid off as well. This office mainly provides support for Site 5, A Small Orange, and Arvixe. For all employees that are losing their jobs at both Utah and Texas offices, EIG will offer them severance packages, including 1 month salary, 3 months COBRA benefits coverage, 1 week per year of employment, and 2 weeks “standard severance”.  

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