Austin unicorn Workrise has laid off an unspecified number of employees as it exits several verticals and seeks to divest 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, TC reported that the company had raised $300 million at a $2.9 billion valuation. At that time, Workrise 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. It changed its name in early 2021 to reflect a new emphasis on industries other than just oil and gas after the industry took a beating in recent years.
But it looks like the company is returning to its roots after a pandemic pivot didn’t work out as planned.
In a statement, Workrise spokesperson Dan Bank told TC:
In recent months, Workrise has engaged on a go-forward strategy supporting skilled workers in the energy industry. In this pursuit, Workrise has decided to exit verticals that no longer align with its go-forward strategy.
Unfortunately, many of our colleagues will be impacted as part of this restructuring and we have made the difficult decision to reduce headcount. This was done after careful deliberation and is a result of positions being eliminated, departments consolidated and an overall 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 laborers grow their career in our core industries, including oil & gas and renewables.
In an internal email to employees obtained by TC, CEO and co-founder Xuan Yong noted that the expansion into new markets beyond oil and gas was aimed at diversifying Workrise’s business and support a broader range of skilled tradespeople. 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 it can “make the greatest impact” in energy.
“With this in mind, we evaluated the rest of our portfolio and saw that some businesses were not the right complement, both from a financial and product perspective. The diverse range of businesses and workers we served created enormous complexity, which impeded us from effectively scaling and growing them. It was harder to deliver a worker-first product when we were spread across several industries with very specific needs. That is why we made the very difficult decision to exit certain verticals to focus on energy – oil & gas and renewables,” Yong wrote.
As a result, he said the company would “immediately right-size” parts of its business and divest from 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 less clients and workers to support. And the sad reality is we will have to reduce our corporate workforce to support our go-forward business. This wasn’t an easy decision, but it’s necessary for the future success of our company.”
It’s not the first time the company has had to lay off workers. In 2020, Workrise laid off one-quarter of its corporate employees as the industry took a hit from the COVID-19 pandemic. In this case, it appears that a pandemic pivot did not work out 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 out 2020.