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Recruiting startup SeekOut, valued at $1.2 billion, has laid off 30% of its workforce. The significant reduction is part of the company's restructuring efforts amid evolving business challenges.
SeekOut, an eight-year-old recruiting startup utilizing AI to find candidates, cut about 30% of its workforce last Thursday, according to TechCrunch.
“Lately, we have been spending roughly $2 to earn $1, leading to significant cash burn this past fiscal year,” wrote SeekOut’s CEO Anoop Gupta and CTO Aravind Bala in a letter to employees. “To put us on a sustainable trajectory, we must make significant employee reductions.”
This marks the second round of layoffs for the Seattle-based startup, which previously let go of 16 employees, or about 7% of its workforce, in October. After those cuts, the company had around 200 employees, according to GeekWire.
The letter indicated that the company will refocus on fewer initiatives with the most significant impact on customers and business value.
“This reduction is a strategic measure to strengthen our financial position and maintain our competitive edge in talent acquisition and management,” said Sam Shaddox, SeekOut’s general counsel and chief privacy officer, in an email to TechCrunch. Departing employees are receiving extensive support.
SeekOut was valued at over $1.2 billion in January 2022 when it raised $115 million in a Series C round led by Tiger Global. At that time, the company’s revenue was growing 300% annually, with annual recurring revenue (ARR) between $25 million and $50 million.
However, the recruiting environment has changed significantly since then. Rising interest rates have made finding talent in areas like technology easier, leading both large companies and startups to focus more on their bottom lines. Tech giants like Alphabet and Meta have laid off thousands of workers throughout 2022 and 2023, affecting SeekOut’s business, which helps companies in sectors such as technology, pharmaceuticals, aerospace, defense, and banking find "hard to find" and diverse candidates.
SeekOut’s other investors include Madrona Venture Group, Mayfield, and GV.
Source: techchrunch
