Workrise cuts staff, verticals after being valued at $2.9B last year – TechCrunch

Austin unicorn Workrise has laid off an unspecified number of employees as it exits various verticals and looks to sell parts of its business.

The company, which has built a workforce management platform for the skilled trades, confirmed that it was laying off employees, but declined to say how many. Just last May, TechCrunch reported that the company had raised $300 million at a valuation of $2.9 billion. At that time, Workrise it currently had more than 600 employees in 25 offices.

You may know the startup better by its former name, RigUp. The company was founded in 2014 as a marketplace for on-demand services and skilled labor in the energy industry. That changed his name in early 2021 to reflect a new emphasis on industries other than oil and gas after the industry took a beating in recent years.

But it looks like the company is getting back to its roots after a pandemic twist didn’t go as planned.

In a statement, Workrise spokesperson Dan Bank told TechCrunch:

In recent months, Workrise has engaged in a forward strategy that supports skilled workers in the energy industry. In this pursuit, Workrise has decided to exit verticals that no longer align with its forward strategy.

Unfortunately, many of our colleagues will be affected as part of this restructuring and we have made the difficult decision to reduce our workforce. This was done after careful deliberation and is the result of job elimination, department consolidation and a general shift in growth priorities. This was not an easy process, but we believe this realignment is in the best interest of the company as we move forward helping skilled workers build their careers in our core industries, including oil and gas and renewable energy.

In an internal email to employees obtained by TechCrunch, CEO and co-founder Xuan Yong It noted that expansion into new markets beyond oil and gas was intended to diversify Workrise’s business and support a broader range of qualified traders. He added that the COVID-19 pandemic had accelerated the company’s investment in those markets.

He went on to say that since then, the company has decided that it can “have the biggest impact” on energy.

With this in mind, we evaluated the rest of our portfolio and found that some businesses were not the right match, both from a financial and product standpoint. The diverse range of businesses and workers we serve created enormous complexity, preventing us from scaling and growing them effectively. It was more difficult to offer a worker-centric product when we were spread across multiple industries with very specific needs. This is why we made the very difficult decision to exit certain verticals to focus on energy: oil and gas and renewables,” Yong wrote.

As a result, he said the company would “immediately downsize” parts of its business and divest others. He added that Workrise has signed buyers for one of its businesses and is exploring sales for the rest.

Yong also wrote, “In the immediate future, we will have fewer customers and workers to support. And the sad reality is that we will have to reduce our corporate workforce to support our ongoing business. It was not an easy decision, but it is necessary for the future success of our company.”

It is not the first time that the company has had to lay off workers. In 2020, Workrise laid off a quarter of its corporate employees as the industry was hit by the COVID-19 pandemic. In this case, it appears that a pandemic pivot did not work for the company.

At the time of its last raise, the company had told me that its gross revenue had tripled since 2018, going from just under $300 million to about $900 million to close 2020.

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