SeekOut, an eight-year-old recruiting startup that uses artificial intelligence to seek out candidates, laid off about 30% of its workforce last Thursday, TechCrunch has learned.
“We recently spent approximately $2 to earn $1 and suffered significant financial losses last fiscal year,” SeekOut CEO Anoop Gupta and CTO Aravind Bala wrote in a letter to employees. “Unfortunately, to put us on a sustainable trajectory, we must make significant job cuts.”
This is the second case of layoffs at the Seattle startup. SeekOut laid off 16 employees in October, or about 7% of the workforce at the time, GeekWire reports. The report shows that the company had about 200 employees after October’s staff reductions.
The letter said the company had decided to alter direction and prioritize fewer initiatives that will have the best impact on customers and add value to the company.
“This reduction is a strategic action aimed at strengthening our financial position and maintaining a competitive advantage in the talent acquisition and management segments. Departing employees receive extensive support,” Sam Shaddox, SeekOut’s general counsel and chief privacy officer, told TechCrunch in an email.
SeekOut was last valued at over $1.2 billion in January 2022, when it raised $115 million in a Series C round led by Tiger Global. During this time, the company’s revenues were growing 300% annually and its annual recurring revenues (ARR) ranged from $25 to $50 million.
However, the recruiting environment has modified significantly since then. Finding talent in areas like technology has grow to be much easier in the face of rising rates of interest, prompting each large corporations and startups to pay more attention to their bottom lines.
Tech giants similar to Alphabet and Meta have laid off many 1000’s of employees in 2022 and 2023. This trend will inevitably hurt SeekOut’s business: the company’s software helps large corporations in industries similar to technology, pharmaceuticals, aerospace, defense and banking discover “hard to find” and diverse candidates.
SeekOut’s other investors include Madrona Venture Group, Mayfield and GV.