G2, a Chicago-based B2B software review platform, laid off 17 employees earlier this month, Chicago Inno has learned.
G2 co-founder and CEO Godard Abel confirmed the layoffs to Inno in an email, saying the reduction accounted for 5% of the company’s total staff. The layoffs were part of G2’s strategy to cut costs amid the Covid-19 recession, Abel said. Affected employees were notified last week and the company now employs about 350 people.
Abel said that even though G2’s revenue has steadily grown year over year, and that the company is seeing record web traffic, its marketing customers are spending less with G2 as they battle economic challenges caused by the coronavirus crisis.
Before the layoffs, G2 had already taken steps to minimize costs by pausing hiring and requiring the leadership team to take 15-20% salary reductions, Abel said. Additionally, the senior leadership is forgoing all bonuses this year.
The cost reductions are intended to offset the impact of G2’s smaller revenue growth in 2020 and keep the company on track to become profitable next year, Abel said.
“We did everything we could to minimize the impact on our employees from Covid, starting by pausing hiring and stopping to backfill non-critical positions in March,” Abel said. “In spite of these efforts, we determined we needed to implement a reduction in the G2 workforce to ensure that we can both weather this economic storm and have the resources to return to rapid growth once the world’s health and economy recovers.”
Founded in 2012, G2’s platform allows users to purchase and review business software. Abel said the company is seeing record web traffic growth with over 5 million software buyers visiting the site every month. G2 last raised funding in 2018, when it landed $55 million in a Series C round, bringing its total funding to more than $100 million.
G2 was listed among the Chicago tech companies that was granted a Paycheck Protection Program loan under the U.S. government’s $2 trillion stimulus package, according to data released this week. However, Abel said G2 returned its loan in full as it appeared the company wouldn’t need it. The loan was worth between $5 and $10 million, according to the data.
“Applying for the PPP loan was one of many steps we took in order to protect payroll and jobs when the Covid-induced economic recession first hit,” Abel said. “Thanks to the resiliency of our G2 team and our customers, we were able to protect almost all of our jobs without having to use the PPP funds.”
Laid off employees are receiving severance and medical benefits packages from G2, Abel said.
“G2 is confident that this will be our final cost reduction in response to the Covid economic shock,” Abel said. “We’re expecting a gradual economic recovery to continue this year, and we’re hopeful that a full economic recovery will ensue next year enabling us to re-accelerate growth.”
