Billing software company has laid off about 10% of its workforce citing macroeconomic factors, warning that the global economic environment remains uncertain.
Chargebee Co-founder and CEO Krish Subramanian said in a LinkedIn post late Wednesday that the “difficult decision was driven by external market forces as well as our need to address the operational debt we have accumulated in the last few years.”
YourStory could not immediately ascertain the Chennai-headquartered company’s staff size.
The layoffs at Chargebee signal trouble for the domestic software-as-a-service (SaaS) sector that was regarded as more immune to global economic headwinds, even as edtech and other sectors witnessed massive staff reductions.
The relative calm in the SaaS space until recently was primarily due to companies of all sizes opting to invest in easy-to-use software as opposed to clunky, on-premise solutions to save on time, money and effort, besides boosting productivity.
“Our years in high-growth mode have created operational needs across the company, which is impacting our ability to execute,” Krish said in a note to colleagues that he shared on LinkedIn. “Facing a growing gap between our revenue and spend, we have been reducing our expenses across various areas including tools, consulting, contractors, etc.”
Extending support to the employees being laid off, Krish said macroeconomic factors had started affecting public companies at the beginning of the second quarter, and, while Chargebee was well-positioned for the long-term, a “lack of visibility into the future had made it harder for everyone.”
With the external environment likely to remain uncertain, companies would be expected to move towards profitability at a fast pace, he added.
Referring to a similar situation in March 2020 when the pandemic struck, Krish said the then team of over 200 employees was able to manage the situation but the current scale at which the company was operating made it difficult to control expenses.
Chargebee has offered three months of pay, three months of extended medical benefits, outplacement career services, and a time extension to exercise stock options granted under their stock incentive plan to the employees laid off.
The company has raised a total of $468.2 million across eight rounds so far, including $250 million in a Series H round led by Sequoia Capital India and Tiger Global Management in February.
Chargebee had also indicated that going public was on its cards over the mid- to long-term time period.
Ending his message to Chargebee employees on an optimistic note, Krish said the global SaaS market was still forecasted to grow significantly, and that the company was “well-capitalised to grow along with it.”
