TaskUs swings to profit from loss as it continues growing offshore and cutting U.S. workforce

TaskUs Inc., a New Braunfels-based provider of outsourced digital services, said profit jumped in 2022 as it added 9,400 employees across its growing global footprint.

Revenue was up about 26 percent.

The company finished the year with 49,500 employees at 28 offices in 10 countries — but has been cutting jobs domestically. Last week, it began laying off 186 employees that have been based in suburban San Antonio.

Outside of the U.S. and Ireland, TaskUs added staff at all its sites in 2022, CEO Bryce Maddock said.

“Clients are looking to reduce costs by leveraging our global delivery model shifting expensive in-house resources to our efficient offshore team,” he said, adding the moves resulted in new business signings in the fourth quarter. But it also means “a number of our clients continue to reduce the size of our team supporting them from the U.S.”

On ExpressNews.com: TaskUs to lay off 186 employees in San Antonio as it continues reducing domestic workforce

Its biggest clients include Netflix, Zoom, Uber and Facebook parent Meta.

In a report issued after the market closed Monday, TaskUs reported fourth-quarter profit of $15.7 million, down nearly 18 percent from $19.1 million in the same period a year ago. Revenue increased about 7 percent, to $242.2 million from $226.7 million.

Quarterly profit was in line with Wall Street expectations — and revenue topped them — but its forecast for full-year 2023 revenue missed estimates and its stock was falling Tuesday.

For the full year, the company swung to a profit of $40.4 million from a loss of $58.6 million a year ago. Revenue jumped to $960.4 million from $760.7 million.

Global expansion

“I am so proud of our global team that worked tirelessly throughout this year to advance our strategic goal,” Maddock said. “We continued to maintain what we believe is the strongest corporate culture in the industry.”

The company has most of its sites in the Philippines, India and the U.S., with plans to expand into Japan, Romania and Serbia.

Founded in 2008, TaskUs is moved its headquarters to New Braunfels in 2018. Two years ago, it went public on the Nasdaq composite at $23 per share.

With a market capitalization that’s been edging toward $2 billion, it’s No. 4 among area companies behind Valero Energy Corp., Cullen/Frost Bankers Inc. and Rush Enterprises Inc. — and well ahead of Rackspace Technology Inc.

On ExpressNews.com: TaskUs continues cutting U.S. staff as it grows globally to meet clients’ demands for lower costs

Despite its growth, the company last year began to warn of layoffs, saying clients such as Meta were expressing concerns over the direction of the global economy and seeking lower costs. TaskUs provides content security services for Meta, which it refers to as its “largest client.”

“The number of teammates supporting this client increased by 29 percent from the start of 2022 to the end of the year,” Maddock said Monday. “With scaled offshore operations in both the Philippines and India, we’re well positioned to continue to grow volumes at our largest client in 2023.”

TaskUs last year said it had more than 4,000 employees in the U.S., with most in New Braunfels, San Antonio and Harlingen in the Rio Grande Valley. It has declined to specify the number in each location.

But those numbers are steadily falling.

Most recently, it told the Texas Workforce Commission it’s cutting the employees at its offices in Windcrest “due to business needs.” It said it’s trying to place the impacted employees into other positions but failing that, all would be laid off by March 20.

It remains unclear whether TaskUs will maintain a presence in San Antonio. It had leased 77,000 square feet of space at Rackspace’s headquarters in Windcrest. But when Rackspace announced in October it was leaving that building and selling the real estate, it said it had been notified by TaskUs that it planned to move out.

‘A continuous process’

In an emailed response to questions, a TaskUs spokesperson last week said of the San Antonio layoffs: “As part of a continuous process to optimize our delivery footprint and be responsive to client needs, we are eliminating a small number of roles in the U.S.” It did not respond to questions about future employment.

On ExpressNews.com: The TaskUs at hand: New Braunfels’ largest tech company eyes global growth under the radar

While TaskUs expands globally, its business strategy reflects a trend of cuts among tech giants in Texas and across the U.S. Meta, for example, has announced thousands of layoffs in recent months. That includes layoffs of more than 220 workers in Austin as part of plans to cut 11,000 jobs, or 13 percent of its workforce.

TaskUs’ shift to offeshore sites has impacted the company’s finances. In the first quarter of 2022, at least 33 percent of its revenue came from domestic operations, Maddock said. That figure slipped to 21 percent by the fourth quarter — and he said he expects it to drop to about 15 percent by the end of this year.

TaskUs will continue “to transition roles from the U.S to offshore geographies,” Maddock said. “This transition will now be complete at the end of Q1 [2024], at which time effectively all of our U.S. base revenue with this client will have shifted offshore.”

He said the U.S. will remain “a key geography” for TaskUs, “and will always play a vital role in our global delivery model.” He added that work must stay in the U.S. due to regulatory reasons and client preferences.

“But it’s clear that the growth engine of our company in the years to come will be in efficient offshore locations in the Philippines and India and nearshore operations in Colombia and Mexico and our digital automation capabilities.”

TaskUs shares fell 17 percent Tuesday to close at $17.20.