Raleigh software company Bandwidth cancels jobs agreement with North Carolina
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Bandwidth opened its new Raleigh HQ last August. Photo: Zachery Eanes/Axios
Bandwidth, a communications software maker and one of Raleigh's largest homegrown tech startups, is withdrawing from an incentive agreement with the state that would have required the company to create more than local 1,100 jobs.
Driving the news: The company requested the termination of the deal on Jan. 11, writing that it wanted more flexibility to hire outside of the Raleigh area.
- The company, which would have received $32 million from the state if it reached the hiring target, had yet to take any payments on the deal.
Why it matters: Bandwidth joins a long list of companies that have pulled out of jobs agreements with North Carolina, with many citing a plan to be more flexible in where employees are located.
State of play: Bandwidth built a $100 million headquarters building near PNC Arena — complete with soccer fields, a cafeteria and Montessori pre-school — and requires its employees to work in person, unlike many other tech companies.
- But, even after opening its new headquarters, it has not seen the job growth it anticipated.
- It's added 87 net new full-time jobs since agreeing to the deal in 2020 — but experienced high staff turnover during the earlier stages of the pandemic.
What they're saying: Bandwidth has around 750 employees in Raleigh, and says it is still committed to hiring here — but it has become increasingly interested in hiring outside of the region after buying the United Kingdom-based company Voxbone for more than $500 million.
- The deal expanded Bandwidth's business around the globe.
- "As we evaluate our business objectives, we believe that the company's withdrawal from the grant will give us greater flexibility to drive thoughtful workplace planning along with our North Carolina growth strategy," Bandwidth's chief financial officer, Daryl Raiford, wrote in the letter.
State of play: Shares of Bandwidth's stock soared during the early part of the pandemic, reaching a record high of $178 in 2021 — however it is now trading at $14.82 a share.
Editor's note: This story has been updated to clarify that Bandwidth says it experienced a high rate of staff turnover during the early stages of the pandemic.