Enterprise Collaboration Video Messaging Service, Loom, Cuts 14% of Its Workforce
In a move to ensure sustainability, especially in light of increased economic uncertainty, Loom, an enterprise collaboration video messaging service, has laid off 34 employees, which accounts for approximately 14% of its total staff. Sources close to the matter have confirmed that employees across product and people operations were impacted by the reduction-in-force.
Statement from Founder and CEO Joe Thomas
In a statement provided to TechCrunch, Loom’s founder and CEO, Joe Thomas, said:
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.
Thomas emphasized the company’s commitment to supporting the affected employees through this transition, both in terms of severance packages and career support:
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…
Background on Loom’s Journey
Founded by Thomas and Vinay Hiremath in 2015, Loom has seen significant growth over the years. Initially, the company gained traction with 1.8 million users across 50,000 businesses just three years after its inception. Today, Loom boasts an impressive 14 million users across 200,000 companies, including notable brands such as Netflix, Atlassian, HubSpot, and Juniper Networks.
The Role of Venture Capital in Loom’s Growth
Loom has attracted a substantial amount of venture capital funding, with a total of $203 million invested to date. The company recently announced a Series C led by Andreessen Horowitz, which valued the company at an impressive $1.53 billion, making it a unicorn for the first time.
Other notable investors in Loom include Kleiner Perkins, Sequoia, Coatue, and General Catalyst.
The Reality of Layoffs Among Unicorns
Loom’s decision to lay off employees comes less than a year after the company achieved unicorn status. This trend is not unique to Loom; other unicorns such as Picsart and Cameo have also had to scale back their workforces in recent times.
Picsart, for instance, raised $130 million from SoftBank, landing a valuation of over $1 billion, before laying off 8% of its staff last month, impacting 90 people. Similarly, Cameo, which became a unicorn last year, recently conducted layoffs that impacted 87 people.
The Broader Context: Tech Layoffs in May
The tech industry has seen a surge in layoffs over the past few months, with 15K+ employees affected in a brutal May. This trend is not limited to Loom; other companies have also had to make difficult decisions to ensure their sustainability in these uncertain economic times.
The Future of Loom and the Tech Industry
As Loom navigates this new chapter, it will be interesting to see how the company adapts to the changing landscape of the tech industry. With a strong foundation and a commitment to innovation, Loom is well-positioned to continue delivering on its vision for years to come.
In conclusion, while layoffs can be a difficult pill to swallow, they are often a necessary step towards ensuring the long-term sustainability of companies like Loom. As the tech industry continues to evolve, it will be crucial for companies to stay agile and adaptable in order to thrive in these uncertain times.
