Looking ahead after a challenging year

2022-12-21

Dear Sailors,

As we approach the end of December, it is an opportunity to look back on one of the most difficult years in our company’s history.

Last month, Collins English Dictionary announced that its word of the year was “permacrisis”, meaning “an extended period of instability and insecurity, especially one resulting from a series of catastrophic events”. This describes 2022 well, with the world experiencing a series of economic and geopolitical shocks, one after the other.

In September, faced with a rapidly deteriorating external environment, we shifted gears and began to focus completely on achieving profitability. We did a company-wide bottom-up review, reprioritizing our businesses to move toward self-sufficiency. This required big, painful moves: shifting resources away from sizable projects, and even closing operations entirely in some markets.

As a result of these business decisions, we had to let many of our team members go. For me, this was the most difficult part of everything we have gone through this year. The leadership team debated every option vigorously, knowing the heavy consequences each decision would bring.

Many of you have suffered this year, as we tightened our ship to navigate this series of external crises. You may have felt anxious seeing your colleagues leave, wondered about the future of the company, and felt uncertain about what it would mean for you.

I want to assure you that we will be starting 2023 on stable footing. Most of the big changes we need to make are complete, and I am satisfied with the reprioritizations we have done across our businesses.

Having gone through the discomfort of change, our focus now is to restabilize along this new path: do less, but do it better. Once we build that solid foundation, we will be able to prioritize growth again when the external environment is right for it.

As I wrote to you in September, our push towards self-sufficiency would, in my estimation, take about 12-18 months – in other words, going into early 2024. Three months into this journey, we have started to see progress in the right direction. With continued discipline and determination, I believe we are on track to achieve our goal.

Between now and then, however, I foresee a 2023 that may, in the external environment, prove to be even more challenging than 2022 has been. Europe continues to experience the largest land war it has seen since WWII, inflation has driven food, energy, and other costs sharply up, and economists are predicting recessions in some of the world’s largest economies. Unemployment may climb, and global consumers could cut back on spending, creating difficulties for businesses everywhere.

This grim outlook reinforces my conviction that the moves we have made, although painful, have ultimately been the right ones. We must continue to press on towards our goal of profitability.

In this vein, I want to let you know about two company-wide decisions, for which I seek your understanding and support. First, we will only make promotion-related pay raises this year. Second, we will be giving out bonuses, but they will be lower than what we gave out in 2021. I know such news can be hard to hear, especially around the holiday season. These are temporary but necessary measures to help us build toward a bigger, brighter future.

Across the last 12 months, I have been moved by how all of you have come together to support each other and the company. The responses I have seen, even to some of the unwelcome changes we have had to make, were ones of unity, determination, and resolve. This is what I am most grateful for this year: a team that is willing to pull together in crisis. I thank each and every one of you for continuing to believe in me, in the company, and in the impact we want to make on the world.

As we close the year, I hope that you will be able to find some opportunity to rest, recharge, and spend time with your loved ones. Let us get ourselves ready for 2023. It might be a tough year, but I believe we have what it takes to weather it, together.

Thank you, Sailors. I wish you and your families a happy holiday season and a peaceful New Year.

Sincerely
Forrest