In a significant development, LegalZoom.com, an online legal services provider, has initiated a major reorganization of its operations in Austin, Texas. The Los Angeles-based company, known for its legal and compliance solutions, has decided to cut down its Austin sales division and sell its Austin-area office, which it has considered its operational headquarters.

Reduction in Workforce

LegalZoom’s restructuring efforts include the layoff of 122 sales employees, encompassing various roles within the company. The layoff details were officially reported following the Worker Adjustment and Retraining Notification Act (WARN Act), a federal mandate that requires employers to notify local governments about significant layoffs. In the notice, the company specified that the sales division would be eliminated, affecting all sales employees at its Northwest Austin office, situated on Spectrum Drive in Williamson County. Notably, these employees had been working remotely.

Permanent Changes and Affected Employees

The company has communicated that these layoffs are expected to be permanent, with the affected employees slated to have their last day on December 15. It’s important to note that the exact number of employees LegalZoom currently has in Austin remains undisclosed, as the company did not respond to requests for comment. The company had a global workforce of 1,383 employees as of the previous year.

Impact of Previous Agreements

In 2010, the Austin City Council had approved an incentives agreement with LegalZoom, designed to establish a regional headquarters in Austin and create 600 jobs over five years. As part of this agreement, the company was expected to receive $20,000 per year for a decade, provided it met specific conditions related to job creation. In addition, a state incentives fund was set to provide $1 million to LegalZoom. However, it’s worth noting that the city agreement is currently inactive.

Property Sale and Leaseback

Notably, LegalZoom has taken steps to sell its Austin property. In a Securities and Exchange filing reported by the Austin Business Journal, the company entered into an agreement with Trinity Foundation RE Venture on October 11 to sell the Austin property. LegalZoom is set to sell the campus for $41 million and has agreed to a six-month leaseback on a portion of the property, as indicated in the filing. The decision to sell the campus was made public in an August 8 filing, where the company estimated the campus’s value at $22.7 million.

Tech Industry Layoffs

LegalZoom’s restructuring aligns with a broader trend of cost-saving measures and job cuts in the technology industry across the nation over recent years. Major tech companies with substantial operations in Central Texas, such as Meta, Google, and Round Rock-based Dell Technologies, have also implemented layoffs. In addition to LegalZoom, Accenture, an IT staffing firm, announced hundreds of job cuts for the third time this year, as reported in a WARN notice earlier this month. Central Texas has seen a notable increase in job cuts this year, with 3,805 positions eliminated across various industries, compared to just 472 positions in the previous year.

While the full extent of the nationwide layoffs is challenging to track, experts have indicated that Central Texas has experienced significant impacts. Some industry experts suggest the worst may be over for the tech industry’s wave of layoffs.