An employee uprising at a dysfunctional tech workplace has led to the exit of the CEO after only 9 months on the job
He was fired just nine months after being hired.
Also out: Sam Lawrence, the company confirmed. Lawrence was the chief strategy officer hired by Leimbach. Both executives were let go in the past couple of days, after Business Insider contacted board members inquiring about the investigation.
The shakeup is the latest example of bad behavior allegations roiling a tech company, in the wake of high-profile reports of harassment and sexism at Uber and at several venture capital firms. Business Insider spoke to seven current and former LiveOps employees about the events that led to the change.
They described an employee revolt sparked by the arrival of two Silicon Valley execs, whose management style and freewheeling spending sent the Arizona-based call center company into chaos.
But unlike the case of Susan Fowler, the former Uber engineer who said her complaints of sexism were repeatedly ignored by the company's human resources department, LiveOps' took these complaints seriously, said several of the employees Business Insider spoke to. According to the employees, LiveOps' HR boss Julie Boorse and in-house lawyer Purnima King were instrumental in helping to clue the board of directors into the situation, and ensuring that an independent investigation was completed.
He quit in protest, then became CEO
The revolt led to the ouster of Leimbach and Lawrence and caused the board to hire back one of the key executives who had quit in protest: COO Greg Hanover. Hanover wasn't just hired back. He was handed the CEO job after Leimbach departed.
A LiveOps spokesperson explained:
"Liveops did receive complaints regarding the workplace and quickly engaged a third party investigator and outside counsel to assist in an investigation. Liveops believes that it has taken steps to address any issues that were raised and is glad its employees took the initiative to come forward with concerns about the workplace. As to Greg Hanover's return as the CEO, Greg has long been a valued and respected member of the Liveops team and we are excited that he has returned to the company."
LiveOps would not comment on any specific complaints, citing confidentiality, but Business Insider heard a litany of allegations.
One person described a drunken text message, penned by a manager hired in Leimbach's administration, which referred to women using derogatory terms, along with regular workplace jokes full of sexual innuendo and a systemic discounting of women's ideas.
Reports of yelling and demeaning treatment of all employees were also common.
Lawrence could not be reached for comment but Leimbach alleges that there was really another reason why they were terminated, not having to do with this investigation.
He believes he and Lawrence were fired because he planned make changes with a vendor relationship, a vendor that has a relationship with a board member. He wouldn't elaborate on what he meant by that, citing the advice of his lawyer.
"I believe we were terminated for actions that were in conflict at very senior levels related to our intended actions for a specific vendor. I deny any inappropriate behavior," Leimbach told Business Insider.
Imploded over the summer
LiveOps is a call center operator based in Scottsdale, Arizona. LiveOps gained Valley prestige when it nabbed Maynard Webb as its CEO from 2006-2011. He stayed on as chairman until 2014. Webb is the former COO of eBay, former chairman of Yahoo and a so-called super angel investor. He is no longer involved in LiveOps although one person close to the company said he still owns a stake and was in touch with leadership from time to time. His spokesperson said he was not aware of the investigation.
In late 2016, LiveOps spun out its contact center software unit into a separate company. In December it hired Leimbach to be CEO of the remaining business, which operates call centers for retailers, hotels and the like. It's about a $40 million company, with about 120 employees, employees said. It's claim to fame is that it's a cloud-based call center that allows the call operators (most of them contractors) to work from home.
Under Leimbach and Lawrence's leadership, LiveOps practically imploded over the summer, when around 15 managers, many of them women, quit the company shortly after receiving the company's quarterly bonus.
"Bullying, harassment and sexism"
The employee exodus was due to what many describe as a dysfunctional workplace. The internal investigation looked at a wide variety of allegations.
"There's an intimidation allegation, bullying, harassment and sexism, all that stuff is on the table and folks have examples and witnesses to some events which is what required the board to initiate an investigation led by an outside investigator," one exec told us last week.
The atmosphere was bad almost from the start. In Februrary 2017, a few weeks after Leimbach took the reins, he gathered several leaders to help him prep for an appointment with a large customer. It was Leimbach's first time meeting some of the LiveOps leadership team and, according to one person, he quickly instilled fear in the group: "Who am I going to fire after this meeting?" he threatened.
Several people Business Insider spoke to alleged that the new executives engaged in "reckless spending" on things like redecorating their corporate-paid-for apartments or Leimbach expensing his family's flights to visit him in Arizona.
When it came to the sales team, "He berated them and embarrassed them and has been horrible to them in front of other people," one person said of Leimbach.
For instance, one time, he forbade a group of employees who had flown out for a customer meeting to board their return flight home and ordered them to continue working instead, according to documents seen by Business Insider.
He also allegedly crafted a change to the bonus program from revenue targets to revenue and profit targets. When the company missed its revenue targets "by millions" the bonuses were paid at the 100% rate anyway, including the exec team's own hefty payouts, confirmed three people with knowledge of the matter.
"We shouldn't have gotten bonuses. We didn't meet the revenue. It's not right," one of them said.
Negative reviews about Leimbach began showing up on Glassdoor and multiple people believed that he was trying to unmask the employees who wrote them.
We asked Leimbach about the various allegations. He told us: "Many of the items you describe are specifically addressed in my employment agreement, others are the direct result of driving the changes I was hired to make, and others are outright false. My employment agreement prevents me from commenting further."
Employees cheer
And some of Lawrence's behavior was described as just plain weird. One person told us about a meeting for company leaders that Lawrence hosted called "acid trip," in which everyone had to stay at his house, which meant sharing a bathroom. He reportedly flew managers in for other meetings and then left before they could present their information to him.
Lawerence also oversaw the creation of a new website for the company that raised eyebrows. According to several people, Lawrence's corporate bio on the site promoted and linked to his personal podcast, one that explored all sorts of topics such as "How to practice extreme intimacy with Dominatrix-to-the-Stars Jenny Nordbak". (Lawrence was also known back in the day for launching a startup called Blackbox, a short-lived social network about sex.)
All of this came to head during the investigation. All told about 30 people were involved, multiple people said, so nearly one-quarter of the company. One person who talked to Business Insider last week told us, "I am an existing employee and am scared of what will happen to me and the company if there is no recourse for their actions."
But with the announcement that Leimbach and Lawrence were out and Hanover was back, employees took to Glassdoor to cheer. "Finally the board saw what everyone else did. They did the right thing in replacing the CEO with someone who deserved it all along," one wrote.