Dbt Labs cut 15% of its workforce last month, becoming the third Philadelphia unicorn caught up in the wave of tech layoffs.
The layoffs came a little more than three months after the Philadelphia data analytics startup announced it would acquire San Francisco-based Transform in dbt Labs' first major acquisition. The 15% reduction represents around 64 employees. It's a result of "a challenging year for many within the software space" and represents a "reset," CEO Tristan Handy said in a letter to employees. Handy said the jobs cuts "impact every function of the business."
It hasn't just been a challenging year for companies in the software space, it's been a challenging year for the national tech ecosystem as a whole — and Philadelphia's biggest startups have faltered. In the past year, Gopuff, Misfits Market and now dbt Labs have all laid off substantial chunks of their workforces. Gopuff was the first domino to fall, beginning layoffs last July that ultimately slashed 10% of its workforce — or about 1,500 employees. Misfits Market followed with a 33% reduction in headcount, including 446 layoffs at its South Jersey distribution center when Misfits closed the facility in April and moved the company's headquarters to Maryland.
Handy, in his May 18 letter to dbt Labs employees, painted a picture of the company's rapid growth and the challenging economic environment that has forced adjustments. Dbt Labs grew from 20 people in 2020 to 50 in 2021 and to more than 426 this year.
"We moderated our hiring pace [in 2022], but still grew the team quickly as the market continued to pull product out of us at an aggressive rate," Handy wrote. "Coming out of Q1 2023, the software market is looking at a longer recovery and we need to continue to adapt. I am confident these changes set us up well for the future."
In his message, Handy said employees were offered 12-week severance packages, and the company removed equity vesting cliffs and covered COBRA payments for three months.
A spokesperson for dbt Labs said Handy isn't making additional comments past the note to employees.
Dbt Labs most recently had a valuation of $4.2 billion after raising a $222 million Series D in February 2022. That followed a $150 million Series C in June 2021. In February, it acquired Transform, an aligning data analytics startup founded by a group of Airbnb alums. The company had 30 employees and Handy said at the time that most, but not all would be joining dbt Labs. He called it a "bullseye" acquisition.
Currently, nearly 20,000 companies use dbt's platform, including Condé Nast, JetBlue, Nasdaq and Canva.
According to CrunchBase, over 147,000 workers at U.S.-based tech companies, or tech companies with a large U.S. footprint, have been laid off so far this year.
