Seattle Companies Most Flush With Venture Cash Are Still Cutting Jobs
When a startup company raises a big wad of venture capital, logic would say they are likely to hire a bunch more smart people.
That may have been true in the past, but lately we’ve spotted a disturbing trend: Some of the Northwest companies with the biggest recent VC cash infusions have instead been cutting jobs or imposing hiring freezes. (It also may be a smart business strategy, since who knows what the economy will do, and these companies need to maximize their runway.)
We’ve seen these kinds of cuts happen in at least two of the three local innovation sectors we cover at Xconomy Seattle—cleantech and biotech. Some examples:
—Calypso Medical Technologies. This Seattle-based medical device company raised $50 million last week in the Northwest’s biggest venture capital financing of the year. It had almost 200 employees before it cut one-fifth of its staff in December. The company now has 136 people on the payroll. When I asked CEO Eric Meier if he’s going to staff up again because of the new financing, he didn’t commit to any numbers. The company’s website lists just seven openings for people with expertise in mechanical engineering, clinical affairs, and software engineering.
—Pathway Medical Technologies. The Kirkland-based medical device company cut one-fifth of its workforce, about 39 jobs, back in May. The company raised $42 million in venture capital two months earlier, but the company said it needed to make the cuts because it couldn’t secure the full $55 million it was shooting for, and sales of its device for clearing blockages in leg arteries weren’t pouring in as fast as projected. The company has one job listing now on its site, for a controller.
—3Tier Group. This Seattle-based company raised $10 million in venture capital last December to support its vision of offering predictive climate models to help developers find the best locations in the world for renewable energy projects. 3Tier had about 85 employees at the time. But last week, Xconomy broke the news that 3Tier axed 19 people from the payroll, to cope with what a spokesman called “uncertainty” in the renewable energy market.
—Calistoga Pharmaceuticals. This Seattle-based developer of cancer drugs raised its profile on the local biotech scene with a one-two punch of news in May. Calistoga raised $30 million in venture capital, and a few weeks later, it produced some eye-opening results from its first clinical trial. But despite that positive momentum, Calistoga CEO Carol Gallagher told me that she wasn’t looking to hire anyone, at least right away. She wasn’t kidding. The company, which had 22 employees at last count, doesn’t currently list any job openings on its website.
Know of any other examples of layoffs? Pass the word to email@example.com. If we can confirm it, we’ll add it to the layoff tracker on Northwest technology and life sciences companies.