Chennai-headquartered Software-as-a-Service (SaaS) firm Kissflow has laid off 15 percent of its staff, or around 45-50 employees, across functions such as sales, marketing and product development due to product shut-down and following an annual performance reviews.
“We let off of around 20-25 people because we moved away from land-motion procurement to expand motion, this was done to increase customer acquisition across our products. At the same time, we do annual performance reviews every two to three years, and around 20 people were let go due to this,” Kissflow founder and chief executive officer (CEO) Suresh Sambandam confirmed to Moneycontrol.
The firm had more than 400 employees on pay roll before the layoffs were announced over the last two months. The firm fired employees across India, the US, and the UAE, though in the US and UAE the count was below five.
Founded in 2012, Kissflow offers cloud-based no-code and low-code work management products.
According to its website, Kissflow’s products are used by 10,000 and more customers across 160 countries. The firm has offices in Chennai, the US and Dubai.
The sackings come two years after the firm gifted brand new 5 Series BMW cars worth Rs 1 crore each to its five senior executives to recognise their long association with the firm.
“Every company is looking to optimise and 90 percent of people who were laid off are already placed in companies and the rest 10 percent will also be placed soon,” Sambandam said.
The firm paid severance to the employees who were let go.
The firm has not raised external funding and has remained bootstrapped to date. Sambandam, however, said, “The valuations have not bounced back and we are not in a hurry to raise funds, however, if the market turns suitable and valuations correct we will evaluate raising funds.”
AI and macro impact
The layoffs come at a time when SaaS firms across the world are facing a slowdown due to macroeconomic conditions. Several SaaS firms have also been hit by artificial intelligence.
Last year, Nasdaq-listed SaaS firm Freshworks undertook at least three rounds of layoffs in its product, engineering and go-to-market (GTM) teams from the US location citing performance reviews
Also Read: Indian enterprise SaaS firms adopt novel strategies to survive macroeconomic pressure
Several investors are cautioning SaaS startups to upgrade and integrate artificial intelligence, especially generative AI, into their operations to escape obsoletion and to also raise funds in 2024.
Also Read: Non-AI SaaS startups to face challenges in raising funds in 2024: Upekkha Report
A report by SaaS accelerator Upekha said Series A (around $5 million) investments might see a significant dip and increased stringency in metrics and large language models (LLMs) are poised to have a significant impact, similar to mobile operating systems in 2009.
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