The tech layoff train appears to have rolled into metro Detroit.
Autobooks Inc., a Detroit-based financial technology company that offers a payments and accounting platform for small businesses and raised big money in recent years, on Friday downsized the company, Crain’s has learned.
The closing of an Austin, Texas office, as well as broader layoffs, comes as growth and later-stage startups work to preserve cash at a time when fundraising is largely on the wane.
The layoffs at Autobooks — which had a total of 127 employees as of August of this year, 110 of which were in Michigan — “affected less than 40 team members,” CEO Steve Robert told Crain’s in an email Friday.
Most of those positions were remote, and all affected employees received a severance package, extended benefits and job placement services, Robert added.
“Like other high-growth technology companies, we must recalibrate cost and support models to balance future growth with profitability,” Robert wrote in the email. “While we made the difficult decision to reduce staff, we did so to preserve a strong balance sheet for years of anticipated growth.”
The job cuts “were distributed fairly evenly across several departments,” Robert wrote.
Autobooks raised $50 million earlier this year in a Series C fundraising round. A press release at the time said the company’s software deployments to banks had grown 800 percent in the past year.
In March 2021, the company raised a $25 million Series B round, which was led by Philadelphia-based venture capital fund MissionOG Ventures and included participation from Ann Arbor-based Renaissance Venture Capital, Detroit Venture Partners, Draper Triangle and TD Bank Group. At the time, the company said it had about 75 employees.
Autobooks is far from the only startup technology company that grew rapidly during the pandemic years and now finds itself needing to cut staff.
So far this year, more than 90,000 jobs have been cut from the U.S. tech sector, according to a running tally from Crunchbase News. These layoffs range from the world’s largest companies, such as Amazon – which is about to lay off around 10,000 employees, according to various reports – down to smaller companies such as Autobooks.
In short, the challenges in public markets throughout this year have bled into private capital markets. Companies like Autobooks are finding a far more difficult fundraising environment, with valuations down from their peaks in 2021, and therefore need to conserve cash.
