Google-backed London startup Yieldify laid off just over 10% of its workforce at the start of March.
In a statement, VP of marketing Shawn Cabral confirmed the layoffs, writing that the company “reorganised our current headcount and prioritised skill-sets to serve our valued customers better.”
The layoffs come as Yieldify faces two lawsuits from a competitor alleging that it copied its code and infringed on its patents. Yieldify says the layoffs and the legal battles are unconnected.
Founded four years ago, Yieldify builds e-commerce software that helps online retailers convince people to buy products online by tracking customer behaviour and providing prompts where necessary.
In June 2015, it received $11.5 million (£8 million) in venture capital investment, with the round led by Google venture capital arm Google Ventures (now called GV after Google’s restructuring into Alphabet) and Softbank.
“Over the past year Yieldify grew over 110% [in revenue] and still maintains a very strong growth momentum,” says Yieldify’s statement on the layoffs. “As a part of this growth we have hired an experienced senior management team from some of the leading companies in the MarTech [marketing tech] sector. This new team has put together a plan to be more efficient in order to take Yieldify to the next level and we have reorganised our current headcount and prioritised skill-sets to serve our valued customers better. As a result, regrettably, just over 10% of our employees were laid off on the 3rd of March 2016.”
The company had 172 employees prior to the “restructuring.”
The 110% growth in revenue is between January 2015 and December 2015, exec Shawn Cabral clarified. One person familiar with the matter says that Yieldify experienced a 10% decline in revenue prior to the layoffs, which Cabral confirmed. He said there was a “seasonal drop in revenue, but that is “normal for Q1,” and said that the business is “on target for this year.”
Business Insider understands that the layoffs came without any warning, with those affected let go that day. Yieldify was supportive to those laid off — offering help with interview skills and CV writing. Employees were given between two weeks and two months severance pay, depending on seniority, someone familiar with the matter said.
In 2015, New York-based rival Bounce Exchange filed a suit against Yieldify in a New York federal court, accusing it of copying its code and infringing its patents following a product demonstration, in a case that first came to light earlier this year in a report from The Financial Times. Yieldify denies the allegations.
In April 2016, Bounce filed a second case — this one in a Texas federal court — repeating these allegations and adding some of Yieldify’s customers as defendants. The customers (alongside Yieldify) are accused of “actively inducing others to infringe and/or contributing to the infringement [of Bounce Exchange’s patents].”
Here’s the full statement on the layoffs from Yieldify:
Over the past year Yieldify grew over 110% and still maintains a very strong growth momentum. As a part of this growth we have hired an experienced senior management team from some of the leading companies in the MarTech sector. This new team has put together a plan to be more efficient in order to take Yieldify to the next level and we have reorganised our current headcount and prioritised skill-sets to serve our valued customers better. As a result, regrettably, just over 10% of our employees were laid off on the 3rd of March 2016.
Yieldify – as always – is committed to all our stakeholders and is confident that the changes made will enable us to service customers even better than before. It is a positive step for our business.
The Bounce Exchange claim has nothing to do with the changes made earlier in March 2016. Our policy is not to comment on pending lawsuits – except to say that the case has absolutely no merit whatsoever, and that our company has done nothing unlawful or in any way improper. We are fighting the lawsuit vigorously and are confident that we will be vindicated in the U.S. legal proceeding. It is important that our valued partners and clients know that Yieldify conducts itself at all times with the utmost integrity.
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