SeekOut, an eight-year-old recruiting startup utilizing AI for candidate sourcing, recently reduced its workforce by approximately 30%, as reported by TechCrunch.
SeekOut, The Recruiting Startup Utilizing AI
SeekOut, which was established in 2017, provides software utilized by over 1,000 companies, including prominent names like Salesforce and McKinsey & Co., to aid in recruiting efforts. The software aggregates data from various sources, encompassing over 700 million potential candidates, such as GitHub and published papers, including built-in diversity filters to support inclusive hiring practices.
Anoop Gupta, SeekOut's CEO, was a former technical assistant to Bill Gates and previously headed Microsoft's Unified Communications Group. He was recognized with the CEO of the Year award at the 2022 GeekWire Awards. His co-founders include CTO Aravind Bala, a former Microsoft partner engineering manager who contributed to products such as Bing and Office, along with Vikas Manocha and John Tippett, who also held positions at Microsoft.
SeekOut's Workforce Reduction Due to Financial Imbalance
CEO Anoop Gupta and CTO Aravind Bala told employees that the company has been experiencing a financial imbalance, spending approximately $2 for every $1 earned, leading to a significant cash burn in the last fiscal year. SeekOut had to implement substantial employee reductions to ensure a sustainable path forward.
The Seattle-based company had to downsize for the second time following its October layoffs. Sixteen employees, constituting approximately 7% of its workforce, were terminated, leaving the company with around 200 workers.
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The letter indicated that the company has decided to realign its focus and prioritize fewer initiatives that will significantly impact customers and contribute value to the business.
Sam Shaddox, SeekOut's general counsel and chief privacy officer, informed TechCrunch via email that the reduction in workforce is a strategic move to bolster the company's financial standing and sustain its competitive advantage in talent acquisition and management. Departing employees are also being provided with comprehensive support during this transition.
The Tech Giant's Valuation and Challenges
SeekOut's valuation exceeded one billion two hundred million dollars in January 2022 after it secured one hundred fifteen million dollars in a Series C round led by Tiger Global. The company's revenue was experiencing a remarkable growth rate of 300% annually, with annual recurring revenue (ARR) estimated to be between twenty-five million dollars and fifty million dollars at that time. Since then, the recruiting landscape has undergone significant changes. Finding talent, particularly in sectors like technology, has become considerably simpler due to the rising interest rate environment. Consequently, large corporations and startups have become more focused on their financial performance.
SeekOut's business was inevitably affected by a trend observed in tech giants like Alphabet and Meta, which laid off thousands of workers in 2022 and 2023. SeekOut's software assists large companies across various industries, including technology, pharmaceuticals, aerospace, defense, and banking, identify "hard-to-find" and diverse candidates.
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