Loom, a collaboration startup that sells software for asynchronous video communication, has laid off staff, citing cost reductions amid economic headwinds.
According to sources cited by TechCrunch, the company laid off 34 employees, which amounts to 14% of its workforce. Loom confirmed to Computerworld the number of staff laid off and provided the following statement from CEO Joe Thomas:
We’ve had to make the extremely difficult decision to move forward with a reduction in force across our team. Each person impacted was not only a talented employee, but also a valued individual and teammate. We’re committed to supporting these employees through this transition both in their offered severance as well as career support. We’re confident in the path ahead for Loom. This decision was ultimately made to ensure we’re able to move forward sustainably, especially in light of increased economic uncertainty, and continue to deliver on our vision for years to come.
Loom raised $130 million in Series C funding led by Andreessen Horowitz last year, bringing total funding to $203 million, and a valuation of $1.5 billion. The company, co-founded by Vinay Hiremath, Shahed Khan, and Joe Thomas in 2015, has 12 million users across 200,000 companies.
Loom announced a substantial update to its platform earlier this year with the addition of a collaborative “HQ” that includes a personalized home screen, trending video recommendations, and the ability to follow colleagues. Commenting at the time, Angela Ashenden, principal analyst at CCS Insight, said that the update sees Loom “maturing into a fully fledged collaboration application for teams.”
“It’s a big upgrade for the tool, and one which signposts the company’s ambitions in the enterprise collaboration space,” said Ashenden.
While a hiring slowdown has been evident among large tech firms in recent months — reportedly including Salesforce, Microsoft, Meta, Twitter, and Uber — the picture has been bleaker for startups in the sector.
Collaborative whiteboard software provider Mural, valued at over $2 billion, is said to have cut an unspecified number of employees in May, while virtual events platform Hopin reportedly made 138 workers redundant earlier this year. More than 120 tech firms have laid off staffers since the beginning of the year, according to tracker site Layoffs.fyi.
A widely-shared memo from startup accelerator Y Combinator last month warned founders to “prepare for the worst” amid economic concerns.
“If your plan is to raise money in the next 6-12 months, you might be raising at the peak of the downturn. Remember that your chances of success are extremely low even if your company is doing well. We recommend you change your plan,” the memo reads.
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