OutboundEngine, a small business marketing and customer engagement software company, is laying off 52 employees, Austin Inno has confirmed.
"The layoffs are a direct response to COVID-19 and its sea change impact to the financial markets," OutboundEngine CEO Marc Pickren told Inno via email. "These actions are necessary to secure a bright future for the company, including preserving hundreds of jobs in Austin, Texas."
OutboundEngine is now one of three Austin tech companies where we've reported about layoffs in recent days as startups and businesses everywhere try to prepare for the financial hit and unknown turbulence caused by the coronavirus pandemic. Reports show hospitality startup The Guild laid off 38 and Yonder let go of 18 employees.
In addition to layoffs, Pickren said the company reduced ongoing compensation for leadership, management and current employees. After the layoffs, the company has about 135 employees.
"Leadership specifically has reduced compensation by 30%," he said.
Pickren noted that the company has a $24 million annual run rate while also addressing the uncertainty ahead.
"The last time we reduced our force by roughly the same amount was when we closed our Arizona office in 2017," he said. "I guess what I am saying is that we are an established venture backed company, have a history of preserving and protecting jobs in Austin and are here for the long term. We made this incredibly difficult decision because we know that we can focus on the current team and serving our customers through these challenging times."
OutboundEngine, founded in 2012 by Branndon Stewart, has raised about $48 million from venture capital firms including Austin-based S3 Ventures and Silverton Partners, as well as Noro Mosely, Alerion Partners and Harmony Partners. It most recently raised $14.3 million in debt and equity funding in August 2019.
Another complicating factor is that OutboundEngine had to notify its employees of the layoffs and reductions remotely because of the shelter-in-place orders in Austin and throughout much of the nation. They shared the news through phone calls with direct supervisors. The company is working with employees on severance packages and extended COBRA insurance coverage.
But the company says it is prepared to continue onward under the new circumstances.
"Post this action we are sufficiently staffed, capitalized and will be able to maintain a high level of sales and service into 2021," Pickren said.
He said he's hopeful business will come roaring back soon.
"Restrictions on business and commerce will eventually be relaxed and lifted," he wrote. "I expect to see demand from many sectors and a strong compulsion for consumers and businesses to get back to the workplace. I have faith that we will emerge stronger, it's just what we do as Americans."
OutboundEngine's staff reduction comes as companies everywhere are trying to prepare for leaner times, with only a few exceptions in sectors like health-tech and food delivery.
Mike Smerklo, co-founder and managing director of Austin VC firm Next Coast Ventures said companies large and small, especially businesses focused on serving consumers, are being forced to determine the impact the coronavirus disruptions will have on their business.
"This is a very difficult and unprecedented time for just about any business," he said via email. "The unfortunate reality is that companies are being forced to make incredibly difficult decisions around headcount, employee reductions and layoffs."
He said a few companies, such as Next Coast Ventures portfolio startup Everlywell, which is making at-home COVID-19 test kits, are working quickly to find solutions to the crisis.
"In the meantime, we expect that unfortunately these type of cuts in workforce will continue as every organization attempts to navigate this incredibly challenging situation we all find ourselves in with the COVID outbreak," he said.
The Austin Business Journal's Mike Cronin contributed to this report.
