Domestica, a Spain-based online education platform, faced a mass layoff situation after dismissing dozens of workers. The total number of job cuts cited worldwide reaches about 150, with at least 70 in Spain. In response to inquiries from EL PERIÓDICO DE ESPAÑA, the company’s CEO, Julio Cotorruelo, disputed the figures and stated that the organization has not cut more than necessary and currently has around 40 open positions.
Many employees left under remote conditions and did not meet colleagues in person, which makes tallying the exact count challenging. They rely on a dedicated chat group for laid-off staff to track figures, and some describe being terminated over the phone. One worker recalled that during the call, access to tools such as Adobe and Gmail was severed, and there were prompts to recover as many devices as possible.
According to the CEO, Domestica lists roughly 800 employees on a global basis. The parent entity, Domestica INC, has operated in the United States since 2010 and counts about fourteen subsidiaries, two located in Spain: DMSTK, established in 2014, and Estudios de Recordación Digital, founded in 2019.
The company’s origin traces back to a non profit forum for Spanish designers, founded in 2004 by Webactiva, the firm behind early web pages managed by Cotorruelo at that time. The project grew into a substantial community that was absorbed in 2008. The entrepreneur acquired the platform, retained the personnel involved, and expanded independently. He exited Webactiva in 2013 and focused on Domestica plus other ventures in the education space.
DMSTK and Digital Recording Studios joined the group, bringing the headcount to 192 employees in 2020 according to Commercial Registry filings. The figures illustrate the surge in online education demand during the pandemic, contributing to a turnover exceeding nine million euros in that year.
The early pandemic success set the stage for a major investment announced in the following January. A funding round valued at about 1.2 billion euros and 110 million dollars in capital was disclosed, positioning Domestica among unicorns in the tech education sector. Several Spanish unicorns at the time included Glovo, Jobandtalent, eDreams, Wallbox, Cabify, Idealista, Devo, Travelperk, and Flywire.
A Secret ERE
Among the layoff actions, 33 workers joined a single lawsuit seeking annulment. Esther Coma, representing Colectivo Ronda Madrid, notes that a settlement process and group action were considered by the plaintiffs. Coma added that the case might not yet have been formally filed with the company at the time of interviews.
Legal observers point out that a cohort of more than thirty employees had formed a group to exceed legal thresholds set for employee protections. Spanish law requires an ERE, a formal Employment Regulation File, when substantial layoffs occur within a three month window. The thresholds vary by company size, and in this case questions arose over whether the two Spain based subsidiaries should be treated as separate entities or as a single corporate group. The defense argues that the subsidiaries operate independently in different lines of business, while plaintiffs contend that the group is effectively a single entity for purposes of calculating the layoff count.
Executing a mass layoff typically involves negotiations with workers about severance and post employment terms, a process that can be slower than firing individuals one by one. Cotorruelo contends that neither Spain-based subsidiary exceeded thirty staff and asserts that each unit is independent: one focuses on course production, the other on software development and marketing. The workers hired by DMSTK and those by Digital Recording Studios say they communicated through the same corporate email domain and collaborated in a single Slack workspace. The wave of layoffs led to a notable drop in internal chat activity as staff moved on.
Analysts note that the two entities may be treated as a business group by some observers, which would push totals above the threshold when counts are combined. Cotorruelo maintains that this interpretation is not supported, and he emphasizes the independent nature of the subsidiaries and their separate business lines.
Dismissal under the Banner of Reduction in Demand
The layoffs occurred in March and were handled on an individual basis. Affected workers describe being dismissed after they requested time off, explaining that demand for the courses had dropped despite a surge in activity during the height of the pandemic. The harmed employees who prepared a joint statement reported that the company offered to sign a dismissal acknowledgment and proceed to mediation, with compensation at 33 days per year worked.
Coma notes that settlements in such cases can be complex and may extend into formal court action if an agreement is not reached by a set date. She indicated that a reconciliation hearing was anticipated and suggested that if negotiations fail, the case could proceed to a court path. The overarching concern from the workers’ side remains that the dismissals may be unlawful and that reinstatement could be the appropriate remedy in some instances.
The discussion highlights how rapid growth during a crisis can prompt strategic decisions that are later scrutinized for legality and fairness. The dispute continues to be watched as it evolves, with labor advocates and company representatives presenting divergent interpretations of responsibility and the proper handling of workforce reductions in a multinational context. [Citation: Legal and corporate sources tracking the Domestica case and related filings.]