TripActions, the $4 billion Andreessen Horowitz-backed corporate travel startup, just laid off 350 employees as the travel industry grinds to a halt

TripActions CEO Ariel Cohen

TripActions,
the corporate travel startup backed by Andreessen Horowitz’s
massive $2.2 billion growth fund
, laid off 350 employees across
business divisions on Tuesday, Business Insider has learned.

The company had over 1,000 employees prior to the cuts,
according to startup database PitchBook, which would mean that the
layoffs affected roughly a third of its workforce.

The
startup
, which was valued at $4 billion after the
Andreessen-led funding round in June, took on a
$500 million in debt financing on February 25 when it launched a
travel credit card
, a fateful decision announced just days
before corporations around the globe curtailed business travel amid
the developing coronavirus pandemic.

“This global health crisis is unlike anything we’ve ever seen in
our lifetimes, and our hearts go out to everyone impacted around
the world, including our own customers, partners, suppliers, and
employees,” a corporate spokesperson told Business Insider in an
emailed statement, in part. You can read the full statement
below.

The cuts are the latest of the
staff reductions sweeping Silicon Valley’s startups
as the
economic impacts of the coronavirus pandemic come into better
focus. Venture investors have already started dialing back
aggressive investment plans while moving ahead with previously
planned deals, and founders of late-stage startups are scrambling
to make ends meet without additional cash reserves. 

TripActions was especially vulnerable to the rapidly changing
economic landscape many startups are just now coming to terms with
because of its heavy reliance on business travel and startup
customer base. The startup skyrocketed to unicorn status in
near-record time, and aggressively expanded into new categories
like banking that required larger investments for even larger
returns. 

TripActions offers companies an all-in-one corporate travel
service, first for booking corporate travel but eventually added
services like expense tracking and reimbursements along with its
corporate travel card. It vaulted to Silicon Valley fame by
offering low-cost tools for other startups before winning larger
contracts for established tech companies with seemingly endless
travel budgets. 

Towards the end of 2019, many investors began pushing startups
like TripActions to prioritize
profitability over growth in the event of an economic downturn
.
Investors saw the tumult at rapid-growth darling WeWork, and the
pressure it put on main backer SoftBank, as a cautionary tale. Now,
many say that strategy shift was a prudent decision in preparing
for the current economic uncertainty, but not every startup heeded
the advice.

Layoffs have come to Silicon Valley in droves for the smallest
startups all the way to household names.
The hospitality industry has taken a large brunt of the cuts, with
home-sharing startups like Sonder, Zeus, and Lyric announcing cuts
this week
. Even public companies are not immune, with tech
giants like Google implementing promotion freezes and newer
entrants like Uber halting new hires. As expected, the surge in
newly unemployed Silicon Valley workers has led to new forums,
message boards, and apps crowdsourcing new employment
opportunities.

Read TripActions’ full statement:

“This global health crisis is unlike anything we’ve ever seen in
our lifetimes, and our hearts go out to everyone impacted around
the world, including our own customers, partners, suppliers, and
employees.

The coronavirus has had wide-reaching effect on the global
economy. Every business has been impacted including TripActions.
While we were fortunate to have recently raised funding and secured
debt financing, we are taking appropriate steps in our business to
ensure we are here for our customers and their travelers long into
the future.

We’ve cut back on all non-essential spend and made the very
difficult decision to reduce our global workforce inline with the
current climate. We look forward to when the strength of the global
economy and business travel inevitably return and we can hire back
our colleagues to rejoin us in our mission to make business travel
effortless for our customers and users.”

SEE ALSO: Brex,
the $2.6 billion credit card startup, just used its deep pockets to
acquire 3 startups as founders scramble with sinking valuations and
VC uncertainty


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Source: FS – All-Travel destinations-News
TripActions, the billion Andreessen Horowitz-backed corporate travel startup, just laid off 350 employees as the travel industry grinds to a halt