SeekOut, an 8-year-old recruiting startup that uses AI to find candidates, has cut about 30% of its workforce on Thursday, TechCrunch has learned.
“Lately, we have been spending roughly $2 to earn $1, and this last fiscal year, we incurred significant cash burn,” SeekOut’s 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 employee reductions.”
The letter said that the company made a decision to refocus and prioritize fewer initiatives that will have the biggest impact on customers and add value to the business.
“This reduction is a strategic measure aimed at strengthening our financial position and maintaining our competitive edge in the talent acquisition and management segments. Departing employees are receiving extensive support,” Sam Shaddox, SeekOut’s General Counsel & Chief Privacy Officer, told TechCrunch in an email.
This is the second time the Seattle-based startup has had layoffs. SeekOut laid off 16 employees in October, or about 7% of its workforce at that time, GeekWire reported. After its October staff cuts, the company had around 200 employees, according to the report.
SeekOut out was last valued at over $1.2 billion in January 2022 when it raised a $115 million in a Series C round led by Tiger Global. At that time, the company’s revenue were growing 300% a year and its annual recurring revenue (ARR) ranged between $25 million to $50 million.
But the recruiting environment has changed substantially since then. Finding talent in areas such as technology has become much easier amid the rising interest rate environment, which led both large companies and startups to pay more attention to their bottom line.
Tech giants, such as Alphabet and Meta, have laid off many thousands of workers throughout 2022 and 2023. The trend inevitably hurt SeekOut’s business: The company’s software helps large companies in industries including technology, pharmaceuticals, aerospace, defense and banking identify “hard-to find” and diverse candidates.
SeekOut’s other investors include Madrona Venture Group, Mayfield and GV.