Austin-based Rev.com Inc., which creates speech-to-text software, said in a letter to the state that it plans to lay off 85 employees later this month.
The layoffs, which will be on Oct. 21, were prompted by a lack of financing. The company said in an Oct. 7 letter to the Texas Workforce Commission that a lender "has suddenly reduced" Rev.com's ability to borrow, "resulting in a need to cut costs immediately."
The layoffs became public Oct. 10 with the release of a Worker Adjustment and Retraining Notification letter. Such letters are required nationally for plant closings or mass layoffs. Rev.com said the layoffs would impact its Austin office, in Hartland Plaza on West Sixth Street.
It's an abrupt change for the company. Just last year, Rev.com announced plans to hire for 130 new jobs, mostly in Austin, which would roughly double its local employee count.
It was not clear how many people the company currently employs. Rev.com declined an interview request but sent a written statement:
"In Rev's pursuit to meet a growing market demand, we grew too fast, and we regret the impact this had on our people," Rev.com CEO Jason Chicola stated. "This reorganization of our business will allow us to become profitable and avoid reliance on outside capital in a changing economic environment. We are confident in Rev’s future as the leader in accuracy and accessibility within the world of speech to text, and want to thank the employees who helped shape Rev into what it is today."
The company, co-headquartered in Austin and San Francisco, has raised about $33 million in venture funding.
Rev.com's automatic speech recognition technology is used by both customers seeking transcription services and software developers looking to build speech recognition in other applications and services.
Layoffs at startups have been increasing in the past year or two. Some reductions have been driven by changing market conditions amid the pandemic, and others have cut staff because they hired too many people too quickly at a time when some venture capital firms have been more conservative in dishing out startup dollars.
Layoffs.fyi, a website that has been tracking startup staff reductions since the start of the Covid-19 pandemic, has tallied 671 startups that have made layoffs during 2022. That has impacted about 86,100 employees. Since the start of the pandemic, the site has counted 1,227 startups initiating layoffs, which has impacted about 182,000 employees.
The layoffs present a unique opportunity to hire experienced tech workers at a time when the Austin labor market is historically tight, with unemployment at a seasonally unadjusted 3% in the five-county metro in August.
Already, some employees have taken to social media to offer their skills to new employers. LinkedIn, in particular, has become a hot spot for #OpenToWork posts that are often seen by recruiters.
Rob Zaleski, head of brand at Austin-based ShippingEasy, already made a pitch to departing Rev.com employees.
"Always a bummer to hear an Austin tech company is forced to lay off a bunch of employees," he wrote on LinkedIn. "For anyone in my network (or someone you know) affected by the Rev layoffs, Auctane has a ton of open positions in various departments. Come work for a growing company in the e-commerce space, and tell 'em Robzie sent ya."
