Cincinnati startup Astronomer, one of the region’s top venture-backed companies, has slashed dozens of jobs as the economic downturn continues to slam the tech sector in 2023.
Astronomer, which helps companies manage their large sums of data, last week cut 76 positions, or more than 20% of its workforce. The layoffs were announced in a company blog post authored by new CEO Scott Yara.
Yara, in the memo, also referenced changes to Astronomer’s leadership team and a move toward a “simplified organizational structure.” He said Joe Otto, who’s led Astronomer since 2018, will be stepping down. Yara and Otto have served as co-CEOs for the last year.
“As a board, we have decided a single CEO is required to lead our company successfully through this next phase of growth,” Yara wrote.
Yara first joined Astronomer’s board in early 2020, when he personally invested in the company. Yara, months later, joined Palo Alto-based Sutter Hill Ventures as a managing director. Sutter Hill participated in Astronomer’s unannounced Series B fundraise and its most recent Series C, a $213 million round from March.
Otto will continue to serve on the board and will “be active in supporting the company in any way that he possibly can,” Yara wrote. “We will all have the time and place to thank Joe properly, as his contributions are far too many and significant to enumerate today.”
Astronomer, founded in 2015 in Over-the-Rhine, is the region’s second best-funded startup, and one of Greater Cincinnati’s rare unicorn companies. Its backed by leading venture capital firms Bain Capital Ventures, Insight Partners, J.P. Morgan, Sierra Ventures and others.
The company is developing modern data orchestration tools powered by Apache Airflow, an open-source platform for data engineering pipelines.
In June, the company released its latest product, Astro, a cloud-based modern data orchestration platform (data orchestration aims to break down silos to make data accessible across an entire organization).
Yara said Astro is quickly becoming Astronomer’s largest product and will soon count for the majority of its subscription revenue. But it appears Astronomer overhired before the adoption patterns around Astro “had become clear.”
The affected positions largely included its sales go-to-market team. As of April, Astronomer employed 260 globally with additional hubs in New York, San Francisco and San Jose, Calif.
“On the strength of our balance sheet, we started to aggressively invest and scale our company across all functions. This decision was a mistake for which I want to take full responsibility,” Yara wrote.
Yara said those impacted received “generous severance, equity vesting, health care insurance and transition support.”
To date, Cincinnati has been largely isolated from the broader slashing of tech jobs nationwide. Blue Ash-based insurtech Coterie eliminated 30 jobs, or 20% of its workforce in June. CEO and co-founder David McFarland credited the decision for saving the company from deeper cuts down the line, while calming its cash burn and extending its runaway of funds as the investor market tightened.
The tech sector last year lost more than 150,000 jobs, per tracking site Layoffs.fyi, and 2023 is off to a rocky start: Amazon and Salesforce last week cut 8,000 jobs respectively, while San Francisco-based cryto company Coinbase just laid off 950.
Yara said Astronomer “remains fully funded with the capital needed to get to cash-flow breakeven and profitability.” The market Astronomer serves, he added, is still very much in its infancy.
“With the reductions in spend, we are better equipped to emerge from the downturn in the economy as one of the true growth leaders of our industry,” he wrote.
