Seattle-based data storage provider Qumulo laid off about 80 employees Wednesday, or roughly 19% of its staff, in the latest round of job cuts affecting tech companies.
In a memo sent to employees and obtained by GeekWire, Qumulo CEO Bill Richter cited economic conditions and getting the company to profitability as reasons for the cuts.
Hundreds of tech companies are slashing staff amid inflation and the possibility of a recession. Venture capitalists are advising startups to cut expenses and extend their cash runways.
Other Seattle startups including Esper, Convoy, and Keepe have laid off employees in recent months, in addition to larger companies such as Redfin and SAP.
In an interview with GeekWire on Wednesday, Richter said Qumulo is not seeing a slowdown in demand from customers. But the company is now operating in a different macroeconomic environment, he said.
“The two most important things are growth and profitability — not one or the other,” Richter said.
Qumulo last raised capital in 2020 when it reeled in a $125 million Series E round at a $1.2 billion valuation, making it one of a handful of Seattle “unicorns” to eclipse the $1 billion valuation mark.
The cloud file storage and management company helps companies manage unstructured data. There are now more than 200 billion files handled by Qumulo for customers such as Telus, University of Florida, and others.
The acceleration of cloud technologies during the pandemic contributed to record growth in its business, Richter told us on the GeekWire Podcast last fall.
Qumulo had about 300 employees at the start of 2020, and then ramped up hiring, reaching a peak of 450 people. But some growth expectations “did not sufficiently materialize,” Richter wrote in the memo, and excess headcount “added organizational complexity.”
“We must operate a lean organization, invest where there are clear and repeatable returns, and be honest about what’s not paying off or sustainable,” Richter wrote in the memo.
There are now about 350 employees at the company following the job cuts, Richter said.
Qumulo investors include BlackRock, which led the Series E round; Highland Capital Partners; Madrona Venture Group; Kleiner Perkins; and Amity Ventures. Total funding to date is $351 million.
Richter, also a venture partner at Madrona, joined Qumulo in 2016. He previously was an executive at Isilon Systems, a data storage company that sold to EMC for $2.25 billion in 2010.
Former Isilon employees Peter Godman, Neal Fachan, and Aaron Passey founded Qumulo a decade ago. Godman stepped down as CEO when Richter was hired, and left the company in 2018. Passey left in 2016 and was a principal engineer at Dropbox from 2017 to 2021. Fachan left Qumulo in April but remains on the board.
Qumulo in May hired Kiran Bhageshpur as chief technology officer. Bhageshpur was CEO and founder of Igneous, which sold to Rubrik in 2020, and also previously worked at Isilon.
Editor’s note: This story was updated to reflect that Neal Fachan left the company April 1.