Carta Cut Revenue Outlook, But Continued Hiring
Carta announced that it would cut 161 jobs on April 15, according to Business Insider. "First, I am very sorry. I'm sorry that we are going through this as a company," CEO Henry Ward said "And I am sorry that all of you are going through this as Carta employees, Americans, and human beings. It is a scary and sad time."
Carta is a startup based out of San Francisco that sells financial software to Silicon Valley companies. Carta's full-time employee count has grown in the past few years and briefly eclipsed 1,000 before the layoffs started. Carta was not directly affected by the pandemic, but it wanted to prepare for the economic implications an all out recession would have on its business.
Some employees question the focus of the company and the erratic hiring patterns. The same day that the company laid off 16 percent of its employees, a rumor emerged that the company had secured $180 million in funding at a $3.1 billion valuation. The company had also received $315 million in its Series E funding round last year. So did the company really need to lay off that many workers?
Furthermore, there was a lot of change at the company. In less than a year, the company lost its head of marketing, chief people officer, chief technology officer, and chief strategy officer, and a senior vice president in sales. Carta almost doubled its revenue in 2019, growing from $50 million to around $95 million. Carta expected the trend to continue in 2020, but cut its outlook one the pandemic emerged as a threat.
Carta is predicting that hiring at other Silicon Valley firms will slow and therefore decreased their revenue outlook and workforce. "It wasn't that the layoffs were necessary right now. But as COVID progresses, it will become clear that the business was hit," said a former manager that was laid-off. The severance package included three months' pay, health insurance through 2020, and a one-year cliff on vested shares for everyone except recent hires.
Not long after the layoffs on April 15, Ward announced CartaX, a securities exchange that allows the trading of private assets. The company plans to launch CartaX this summer and will include shares of Carta on the platform to be traded. The platform is still pending regulatory approval and the company is actively looking for employees to help with the project. Ward has high hopes for CartaX. "If CartaX wins, in 10 years there won't be a NYSE or a Nasdaq," Ward said.
Carta seems to be a turbulent business that has strong support from investors but is lacking employee confidence.