A cybersecurity startup that had rapidly growing revenue at the start of the year has cut one-fifth of its workforce amid the economic downturn.
Finite State Inc. eliminated 16 positions this week, founder and CEO Matt Wyckhouse confirmed in a written statement in response to questions from Columbus Business First.
Finite State had grown to 74 employees in late March and was hiring. As of Friday the company said 63 remain.
"This action was necessary to ensure that we remain laser-focused on solving the most critical problems for our customers while operating responsibly during this period of uncertainty in the capital markets," Wyckhouse said.
Tech companies have terminated more than 26,000 employees globally since May 1, according to the tracking website layoffs.fyi. The plummeting stock market, pullback in VC investing and customer caution in response to inflation have hit tech companies that usually operate at a loss to begin with while pursuing growth.
Other local workforce reductions include 330 jobs at Root Inc. in January and an unspecified number at the Columbus U.S. headquarters of Swedish fintech Klarna. Olive AI Inc. froze hiring this month after adding some 250 jobs this year.
Finite State's technology automates the search for security vulnerabilities in the embedded chips and firmware driving millions of wireless devices, especially in energy and healthcare. Demand had surged with the threat of Russian attacks since it invaded Ukraine in February.
The company in March expanded its C-suite with an executive vice president and CTO, preparing to become a larger employer. In the portfolio of Columbus' Drive Capital LLC, Finite State has raised a cumulative $50 million, including a $30 million round last August.
Root and Olive also are Drive companies; the VC firm through a spokesman declined to comment.
The first quarter was shaping up as the best for sales in more than four years in business, and at the time Wyckhouse foresaw that growth continuing throughout the year. The company tripled its customer base last year.
That upward trajectory continues, Wyckhouse said.
"With rising numbers of threats and vulnerabilities impacting connected devices throughout our critical infrastructure, demand for product security has never been higher," he said. "We expect to see significant customer and revenue growth over the next several years."
The workforce reduction was necessary for efficiency and flexibility, Wyckhouse said.
"We deeply appreciate the service of all of our team members, and we have offered substantial transition assistance to all of those affected," he said.
