SeekOut cut 30% of staff, saying it was spending about $2 to earn $1

Seattle-based AI recruiting startup whose software helps large companies find hard-to-find and diverse candidates

Cutting 30% of staff and focusing on fewer high-impact initiatives puts SeekOut on a sustainable path despite a weaker market for recruiting software

$115M Series C in January 2022 led by Tiger Global; other investors include Madrona Venture Group and Mayfield

SeekOut was an eight-year-old recruiting startup that used AI to find candidates. In January 2022 it raised a $115M Series C led by Tiger Global at a valuation above $1.2B, when revenue was growing 300% a year and ARR was between $25M and $50M.

The hiring market changed: with rising interest rates, big companies and startups paid more attention to cost, and Alphabet and Meta laid off many thousands of workers through 2022 and 2023, which made finding tech talent easier. SeekOut cut 16 employees, about 7%, in October 2023, leaving roughly 200 staff per GeekWire.

On the Thursday before 2024-05-20 SeekOut cut about 30% of its workforce. CEO Anoop Gupta and CTO Aravind Bala told employees the company had incurred significant cash burn and had to make significant reductions to reach a sustainable trajectory.

The company was spending about $2 for every $1 earned

Rising interest rates pushed customers and startups to watch the bottom line

Big tech layoffs in 2022 and 2023 made technical talent easier to find

The 2022 valuation assumed 300% annual growth that had not continued

A 2022 valuation set on 300% growth did not survive a hiring market where talent became easier to find; the company cut twice within seven months.

As of 2024-05-20 SeekOut had cut about 30% of its workforce, its second layoff in seven months, and said it would prioritise fewer initiatives. The company said departing employees were receiving extensive support.