One of Austin's fastest-rising and most heavily-funded startups, RigUp, has laid off a quarter of its of employees, RigUp co-founder and CEO Xuan Yong confirmed with Austin Inno Sunday.
"Based on the economic hit in oil and gas coupled with the impacts of the COVID-19 outbreak, we believe this decision was necessary to support our company’s long-term commitment to our contract workforce and the industries they serve," Yong said via email.
Several employees suggested on LinkedIn that the layoffs impacted a total of 120 people, including account executives and employees in several other roles. The company declined to cite the exact number of layoffs.
RigUp, which created a marketplace for on-demand services and workers in the oil and gas and alternative energy sectors, is coming off a $300 million funding round led by Andreessen Horowitz in October 2019 that gave it a reported $1.9B valuation. It had about 300 employees at that time and was rapidly hiring new workers.
That huge funding round, one of the largest in Austin startup history, is part of what makes the new layoffs stand out from even the four or five other rounds of startup layoffs Austin Inno has covered in recent days as coronavirus-related disruptions send untold numbers of companies into a tailspin.
RigUp’s platform helps oil and gas, and other energy sector companies, find on-demand services and skilled labor. It was founded in 2014 by Yong, a former energy investor at Citadel and D.E. Shaw, and COO Mike Witte, a former petroleum engineer at Encana and private equity consultant in the energy industry.
"All departments were affected differently," Yong said, of the layoffs. "However, our oil and gas related teams were certainly hit the hardest."
The company is providing severance pay, extending healthcare coverage and helping them prepare resumes, as well as allowing them to use company-issued computers if they didn't have a personal machine at home.
Yong noted that he and co-founder and COO Mike Witte are forgoing their salaries and have shifted to minimum wage payment.
"These changes are in line with our mission of putting our contract workforce first and will help support our company's long-term ability to do that in this environment," he said.
