Corporate travel startup TripActions Inc. this week laid off nearly 300 employees in the face of a slowdown in business related to the COVID-19 pandemic.
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TripActions CEO Ariel Cohen confirmed to Crunchbase News via telephone on March 27 that the company let 297 people out of its 1,100-employee workforce go.
The action comes fewer than nine months after the Palo Alto-based startup raised $250 million in a Series D led by Andreessen Horowitz (a16z) at a $4 billion valuation. Other investors in that round included Zeev Ventures, Lightspeed Venture Partners and Group 11. The company crossed $1 billion in valuation in November 2018 when it raised $154 million in a Series C, also led by a16z.
Five-year-old TripActions merges many aspects of corporate trip booking—flights, hotels, and rental cars—with expense tracking. By centralizing corporate travel under one platform, TripActions claims that corporations will save money on employee travel while also scaling travel programs to headcount faster.
In an initial email response to Crunchbase News about the rumored layoffs, the company said:
“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 [a] 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 in line 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.”
The travel and hospitality industries, like many others, is taking a hit due to the pandemic. TripActions is not the only travel-related startup that has announced layoffs as of late.
On Tuesday morning, The Information broke the news that hospitality startup Sonder had laid off or furloughed more than 400 people, or more than one-third of its staff. The high-flying short-term rental provider last July had raised $210 million in a Series D that valued the company at more than $1 billion.
Zeus Living, which provides furnished homes for business travelers, also slashed its staff on Tuesday. CEO Kulveer Taggar said in a tweet that the company would be laying off about 80 people. That represents about 30 percent of the company, according to Business Insider, which first reported the news.
“It’s especially tough because our people are the ones who’ve helped build the company and get us to where we are today,” Taggar said, adding that he is committed to helping those laid off “soft land as much as possible.”
We’ve reached out to Zeus Living for comment, and will update this piece if it responds.
Travel sector heading down a rocky road
On March 13, our own Joanna Glasner reported on how the downturn in travel spending will obviously be disruptive to players in the space. Per Crunchbase data, just over 500 companies globally in travel and travel-related sectors raised seed through growth-stage rounds in the past year, pulling in more than $7.7 billion.
As Joanna noted, reservations have slowed drastically at Airbnb and other online booking sites, and cancellations are up. Beyond Airbnb, there’s a whole ecosystem of startups providing services tied to the short-term rental market. Meanwhile, whether volatility will also delay plans for the year’s most talked about potential liquidity event–an Airbnb IPO–remains to be seen.
This article was updated post-publication to include comment from TripActions.
Illustration: Li-Anne Dias
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