SeekOut, an AI-driven recruiting startup founded 8 years ago, has reduced its workforce by approximately 30% as of Thursday.
“Recently, we have been spending around $2 to generate $1, leading to significant cash burn in the last fiscal year,” stated SeekOut’s CEO Anoop Gupta and CTO Aravind Bala in a letter to employees. “To ensure a sustainable path forward, we regretfully must implement substantial employee reductions.”
This marks the second instance of layoffs for the Seattle-based company. Previously, SeekOut laid off 16 employees in October, representing about 7% of its workforce at that time, as reported by GeekWire. Following the October layoffs, the company maintained a staff of roughly 200.
The letter indicated that the decision was made to refocus the company and prioritize a smaller number of high-impact initiatives to benefit customers and drive business value.
“This reduction is a strategic step to strengthen our financial stance and sustain our competitive position in talent acquisition and management. Departing employees are receiving comprehensive support,” Sam Shaddox, SeekOut’s General Counsel & Chief Privacy Officer, communicated via email.
SeekOut was last valued at over $1.2 billion in January 2022 during a Series C funding round, which raised $115 million led by Tiger Global. At that time, the company experienced a revenue growth rate of 300% annually and an annual recurring revenue (ARR) between $25 million and $50 million.
However, the recruiting landscape has shifted considerably since then. Recruiting talent, especially in technology fields, has become easier amidst the rising interest rate environment, prompting both large corporations and startups to focus more on their profitability.
Tech giants such as Alphabet and Meta have executed significant layoffs throughout 2022 and 2023, which has inevitably impacted SeekOut’s business. The company’s software aids large enterprises in sectors including technology, pharmaceuticals, aerospace, defense, and banking to identify “hard-to-find” and diverse candidates.
SeekOut’s other investors include Madrona Venture Group, Mayfield, and GV.
