UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.05. | Costs Associated with Exit or Disposal Activities |
Aligned with our target organization go-to-market strategy and commitment to be a Rule of 40 managed company, on January 3, 2023, Pegasystems Inc. (the “Company”) announced a reduction in its workforce of approximately 4% of its employees across various geographies. Communications to impacted persons or their representatives are expected to be completed in the first quarter 2023. The Company expects to incur a charge of $18.9 million in the fourth quarter of 2022 related principally to cash severance and related benefit costs for terminated employees.
| Item 7.01. | Regulation FD Disclosure |
The Company today sent to its employees the email attached as Exhibit 99.1 with respect to the announced reduction in its workforce.
Note Regarding Forward-Looking Statements
This Current Report on Form 8-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
Words such as expects, anticipates, intends, plans, believes, will, could, should, estimates, may, targets, strategies, intends to, projects, forecasts, guidance, likely, and usually, or variations of such words and other similar expressions identify forward-looking statements, which are based on current expectations and assumptions.
These statements include, but are not limited to, statements regarding anticipated charges in connection with the reduction in force, and the timing and process for completion of the reduction in force. These statements are based on the Company’s current plans and expectations and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual future activities and results to differ include, among others, the possibility that: there are impediments to the Company’s ability to execute the reduction in force as currently contemplated; the actual charges in implementing the reduction in force are higher than anticipated; and there are changes to the assumptions on which the estimated charges associated with the reduction in force are based. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. For further information, please refer to the Company’s reports and filings with the Securities and Exchange Commission.
The forward-looking statements in this Form 8-K represent our view as of January 3, 2023.
| Item 9.01 | Financial Statements and Exhibits |
| Exhibit No. |
Description | |
| 99.1 | Email to employees of Pegasystems Inc. sent on January 3, 2023 | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL) | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Pegasystems Inc. | ||||||
| Dated: January 3, 2023 | By: | /s/ Kenneth Stillwell | ||||
| Kenneth Stillwell | ||||||
| Chief Operating Officer and Chief Financial Officer (Principal Financial Officer) | ||||||
Exhibit 99.1
Email to Pegasystems Inc. Employees on January 3, 2023
Team Pega,
It’s clear that digital transformation continues to be top of mind for clients. As we kick off 2023, I have never been more excited about the massive opportunity with the world’s most sophisticated brands. I also want to share some important changes we are making in our Go-To-Market teams to ensure alignment with our strategy. These are some of the most difficult decisions to make but are needed for us to succeed in the short and long term.
We made significant progress in 2022, despite the economic uncertainty and distractions thrown at us, and I am enormously excited about what we will be able to achieve in 2023.
We are filing this email publicly, so if helpful, this email may be shared.
A Clear Strategy to Focus Us
Pega Technology provides the most powerful and scalable low-code platform for AI-powered decisioning and workflow automation. Our Product Leadership is broadly recognized by industry analysts and has led to dramatic successes with the world’s most recognized and sophisticated organizations and their partners.
Pega Cloud innovation has accelerated adoption, and we have made tremendous progress on Modernizing our clients who more than ever are able to make use of our latest advancements.
We are strengthening deep, strategic relationships with our clients and their trusted Partners. Driving accelerated value for these clients will translate directly to significant growth for us.
We are building a healthy, agile, and efficient organization so we can work closely with our clients to inspire innovative ideas and creative solutions to their biggest challenges.
We are firmly on the path to becoming a Rule of 40 company, which will drive greater value for our shareholders and opportunities to further invest in our business, our technology, and our people.
Further Changes in our Go-To-Market (the teams reporting to Leon and John)
To continue to drive alignment, we are engaged in a detailed review to further improve our go-to-market operating model, drive role clarity and accountability, enable greater efficiency, and sharpen our client focus — especially where our investment has outpaced our growth.
As a result, there will be some changes and reductions in our staff that we expect will impact approximately 4% of our overall employees. We are working quickly to finalize these changes and team leaders will communicate them as soon as we can. This may be difficult for many of us, particularly for those whose roles are changing or being eliminated, but also for those saying goodbye to colleagues we care deeply for. We will continue to prioritize internal candidates for open positions, and for anyone leaving Pega, we will support their transition in keeping with our values.
We Build for Change
Leading our company through times of change over the last several decades, I know that we will rise to the challenge. In these moments, I am most proud to witness the best of our people, our remarkable innovation, quick adaptability, and incredible empathy. Digital transformation has never been more relevant to our clients, and Pega is well positioned to be the long-term strategic partner with our clients on this journey. Let’s continue to work together as One Pega to drive both their and our success.
Thank you,
-Alan
Document and Entity Information |
Jan. 03, 2023 |
|---|---|
| Cover [Abstract] | |
| Entity Registrant Name | PEGASYSTEMS INC |
| Amendment Flag | false |
| Entity Central Index Key | 0001013857 |
| Document Type | 8-K |
| Document Period End Date | Jan. 03, 2023 |
| Entity Incorporation State Country Code | MA |
| Entity File Number | 1-11859 |
| Entity Tax Identification Number | 04-2787865 |
| Entity Address, Address Line One | One Main Street |
| Entity Address, City or Town | Cambridge |
| Entity Address, State or Province | MA |
| Entity Address, Postal Zip Code | 02142 |
| City Area Code | (617) |
| Local Phone Number | 374-9600 |
| Written Communications | false |
| Soliciting Material | false |
| Pre Commencement Tender Offer | false |
| Pre Commencement Issuer Tender Offer | false |
| Security 12b Title | Common Stock, $.01 par value per share |
| Trading Symbol | PEGA |
| Security Exchange Name | NASDAQ |
| Entity Emerging Growth Company | false |