As COVID-19 has spread across the country and travel grinds to a halt, a Denver-based business travel startup has gone through a round of layoffs.
Pana co-founder Devon Tivona told Colorado Inno that the company has laid off 18 employees as a result of coronavirus impacts on its business.
Pana has created a service to remove the stress from business travel, by coordinating flights, hotels, rides and more on a single, trackable sheet.
For on-site interviews, Pana works directly with the candidate to schedule their trip, serving as a concierge and providing recommendations throughout the process. Billing is kept in a centralized place, and candidates are instructed to upload receipts for meals or other in-trip purchases to Pana’s platform.
As Pana’s revenue is directly tied to the volume of people traveling, Tivona said the company has been hit very hard in recent weeks.
“We realized two weeks ago that a layoff would be a necessary course of action,” he told Colorado Inno in an email. “Up until then we knew the current magnitude of the impact of coronavirus on our business, we didn’t have enough data to conclude how long Pana, our industry, or the entire world would be impacted by the virus.”
As the economy continued to decline, Tivona said the company was faced with a difficult decision.
“In the face of such uncertainty, we are left with two choices: we can hope and plan for the best, and, if we’re wrong in our optimism, we will go out of business and all of us will lose our jobs. Alternatively, if we plan for the worst, we will need to make some painful cuts, but we most certainly will survive,” he said. “By planning for the worst, we've ensured that Pana will survive.”
The largest impacts of the layoffs were to support, sales and customer success teams at Pana.
In an effort to keep on as much of the company’s staff as possible, Tivona said executives have taken pay cuts between 10 and 30 percent. Specifically, Tivona and co-founder Sam Felsenthal have dropped their salaries to $77,000.
"if you don't take strong and decisive action, you're risking the jobs and future of your entire employee base."
To help those who were laid off, Tivona said Pana has offered them a one-month severance package, and a stipend that covers up to two months of COBRA.
“We recognize that mental health is very important during this difficult period of physical isolation, particularly with the added stress of unemployment, so we're also enabling our team to use some of that stipend for sessions with a mental health professional if they choose,” he said.
The company also made modifications to its equity plan, allowing laid off employees more time to exercise their options. Pana plans on back-dating the vesting start date to their original hire date for any employee that comes back when the crisis is over.
Lastly, Pana has created an initiative to help all laid off employees find new roles—assigning a full-time employee, who Tivona said is dedicating almost 100% of their time to helping find new jobs.
This move comes nearly a year after the company raised a $10 million Series A, led by Silicon Valley VC firm Bessemer Venture Partners, with participation from Techstars, Matchstick Ventures and MergeLane Fund.
In offering advice to other founders that may be facing difficult decisions, Tivona advised them to be conservative, but firm.
“The world hasn't experienced a public health crisis like this in over 100 years, and the world is fundamentally different and more connected now than it ever has been before. We have no idea how this will play out both in public health or the economy,” he said. “Also, if you don't take strong and decisive action, you're risking the jobs and future of your entire employee base.”
