Denver-based GoSpotCheck, which sells software used for tracking sales and inventory, laid off 23 employees this week in a move intended to lengthen the amount of time it can operate on its cash on hand.
CEO Matt Talbot said the Tuesday cuts represented about 20 percent of the company, leaving it about 100 employees.
Talbot said the venture-backed company generally has operated on the premise that it would raise additional cash every 18 to 24 months. It’s raised $70 million since it was launched in 2011, most recently in December, when it raised $30 million.
Talbot said this week’s cuts were made with the goal of extending the runway from the December raise to three years. The company expects to see negative impacts from the coronavirus and wants to prepare for the fact that it may be harder to raise money in the future, he said.
The company also has cut its growth projections for this year.
“We’re still going to grow, but we’re going to grow probably by about half,” he said, declining to disclose the company’s revenue.
GoSpotCheck has about 230 customers with about 400,000 mobile workers, Talbot said. Consumer packaged goods and the beer, wine and spirits sectors are two major customer bases, with restaurants and medical device manufacturers in the mix as well. He said he expects all the company’s customers are getting negative impacts from the virus.
Talbot said GoSpotCheck itself has not seen negative revenue impacts yet, but “We’ve seen activity in our platform go down pretty significantly.”
While the company’s contracts with customers tend to be annual or multiyear agreements, he said GoSpotCheck wants to be in a position where it can potentially forgive certain invoices for clients or give them credits if they’re not using the software for a time.
Regarding the departed employees, “The biggest strategy shift we’re making is pulling back from new business,” Talbot said. The company’s marketing, sales, implementation and “customer success” staff, for example, have been consolidated into a single customer team. Some product and engineering staff also were cut.
The Denver Business Journal first reported the layoffs.
Talbot said the company is providing a year of COBRA health insurance reimbursement for employees who were laid off. It’s also giving them $1,500 cash payments intended to be used for counseling or career coaching services.
Company executives also have taken pay cuts up to 50 percent, Talbot said. The company also has nixed some employee perks, including gym memberships, parking and meals.
“Everybody is feeling the pain a little bit,” he said.