Tiger Global and Sequoia-backed SaaS unicorn Chargebee lays off 10% staff

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San Fransisco and Chennai-based software firm Chargebee laid off around 10 percent of its staff amid tight macroeconomic pressures, and to bring down the startup’s accumulated operational debt, said co-founder Krish Subramanian in a LinkedIn post shared late Wednesday.

The company's spokesperson told Moneycontrol that around 142 employees were laid off across teams and geographies.

“This difficult decision was driven by external market forces as well as our need to address the operational debt we have accumulated in the last few years. We have made every effort to offer severance, equity, and job transition support to ease some of the stress caused by these changes,” Subramanian wrote.

As of March 2022, the company had a team of around 1,000 employees on the payroll.

In a letter shared with the Chargebee’s team, Subramanian wrote that the company changed its hiring plan to align with priorities. “We started implementing stricter fiscal discipline to reorient the company towards long-term sustainability,” Subramanian wrote.

The Russia-Ukraine war, a massive hit on the supply chain, runaway inflation, and Fed’s aggressive interest rate hikes may lead to a recession in the US. Experts are also concerned about the US recession spilling across the globe. Almost 80-90 percent of many SaaS firms' businesses are based in the US, and UK, and the balance is in India.

On Wednesday SaaS major Freshworks reported its September quarter results wherein the company also indicated that the macroeconomic pressure has started impacting the business. The company adjusted its growth forecasts for 2022.

“Overall macro pressures led to slower expansion activity in Q3”, said CEO of Freshworks Girish Mathrubootham during the earnings call.

Chargebee started witnessing the impacts at the beginning of Q2.

“At the start of Q2, macroeconomic factors began impacting public companies and financing environment…the new reality will require companies to move towards profitability at an accelerated pace,” said Chargebee’s Subramanian.

Chargebee is settling the lid off employees with three months of pay, three months of extended medical benefits, and an extension time to exercise their stock option granted under the company’s stock incentive plan.

“Along with other benefits, the company is also offering outplacement career services that include networking assistance, resume writing, and interview preparation,” Subramanian wrote.
In fact, Moneycontrol reported on October 4th that several SaaS firms are freezing hiring due to the fear of recession in the global market. SaaS startups including, Zoho, and Kovai. co and Exotel have altered their hiring plans and reduced or frozen hiring in the last few months.

Founded in 2011, Chargebee runs a software-as-a-service-based subscription management platform. The company raised $250 million in funding co-led by Tiger Global Management and Sequoia Capital, which pushed up the company’s valuation to $3.5 billion in 2021.

The company counts Freshworks, Calendly, Doodle, and Pret a Manger, among others, as its clients.