May 21, 2024

Tyna Woods

Technology does the job

a16z-backed Loom lays off 14% of staff, one year after becoming a unicorn – TechCrunch

Loom, an enterprise collaboration video messaging service, has laid off 34 employees, or 14% of its total staff, sources say. Employees across product and people operations were impacted.

The venture-backed company confirmed the layoff and number of people impacted, and provided the following statement from founder and 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.

The company was founded by Thomas and Vinay Hiremath in 2015, hitting 1.8 million users across 50,000 businesses just three years later. Per its website, Loom currently boasts 14 million users across 200,000 companies — including Netflix, Atlassian, HubSpot and Juniper Networks.

Similar to Hopin, Loom benefited from a surge of people working from home in response to the COVID-19 pandemic; the product was positioned to help remote workers find better ways to connect with colleagues in a virtual-first world, and help hybrid workforces find a lightweight way to skip some meetings. Then, again similar to Hopin, the startup conducted layoffs to help it build in what it describes as a more sustainable way moving forward.

That growth has attracted $203 million in known venture capital funding, with the company most recently announcing a Series C led by Andreessen Horowitz. The same round valued the company at $1.53 billion, making it hit unicorn status for the first time. Kleiner Perkins, Sequoia, Coatue and General Catalyst are also investors in the company.

Over a year has gone by since the startup landed the new financing and valuation, and per today’s news, Loom joins the club of unicorns that have had to scale back workforces after landing the coveted milestone.

Less than a year ago, visual creator tools startup Picsart raised $130 million from SoftBank, landing a valuation of over $1 billion. The company laid off 8% of its staff last month, affecting 90 people. Cameo, which also became a unicorn last year, also recently conducted layoffs that impacted 87 people.