Financial software and services provider MainStreet Work Inc. is laying off 30% of its workforce, its CEO announced on Twitter.
Based in San Jose, MainStreet employs about 165 workers, according to PitchBook Data. So, it could be cutting the jobs of around 50 employees.
The shaky financial markets prompted the startup's move, Doug Ludlow, the company's head, said in a tweet Wednesday. With those markets not likely to recover any time soon, MainStreet decided it needed to speed its path to profitability, he said.
"We need to ensure that as a company we are in control of our own destiny, not subject to the whims and waves of the market," Ludlow said.
Ludlow and other MainStreet representatives did not respond to requests for comment.
MainStreet offers software that helps small business save money on services, access government tax credits and invest their cash reserves. Founded in 2019, the company has raised $75.8 million in total venture funding, according to PitchBook. Its backers pegged its worth at $425 million as part of a funding round early last year, according to PitchBook.
The startup plans to offer affected workers severance pay, health care benefits and job placement help, Ludlow said on Twitter. He also appealed to other corporate leaders to let him know if they were hiring so he could help connect them with affected workers.
"I know from firsthand experience just how painful it is to lose a job due to a (reorganization) — it can be confusing, disorienting, and scary — so I understand just how difficult this week is for our affected team members," Ludlow said in a tweet.
In a post on LinkedIn about two months ago, Ludlow warned startup founders they needed to get their financial houses in order. Venture firms are going to rein in their investments "massively" this year, he said.
"If you haven't already started on a path to break-even, start immediately," Ludlow said in the post. He continued: "Companies addicted to (venture) dollars are quite simply going to die."
This isn't the first time MainStreet has been in the news for a controversial move. In 2019 — prior to the widespread, Covid-19-spurred increase in remote work — the startup offered Bay Area tech workers $10,000 each to move out of the region to other areas of the country.
