Flockjay cuts at least half of its workforce as it pivots away from bootcamps into B2B SaaS
Flockjay, a bootcamp startup that helps laid off people and job seekers break into tech, cut half of its own employees amid a broader pivot to a B2B SaaS platform, TechCrunch has learned from sources close to the company.
The layoffs impacted every nontechnical team at Flockjay, including admission advisers, biz ops and development, partnerships, recruiting and marketing professionals. An estimated 30 to 45 people were laid off via an all-hands meeting, which accounts for at least half of Flockjay's full-time staff. A hiring list of those impacted has already been highly circulated on LinkedIn.
As a mission-driven organization, we care deeply about our graduates not only landing jobs, but also earning promotions and becoming future leaders of their companies. We learned while growing how important it is to invest early in building scalable support for our alumni, the teams they are on, and all mission-aligned sales organizations to level the playing field," said CEO Shaan Hathiramani in a statement to TechCrunch. That meant making the difficult but necessary decision to run our classes in a more limited capacity while we focus on building that platform. We recognize that this decision has real human consequences, especially considering how talented and tightknit our team is."
The startup graduated from Y Combinator in 2019 with a simple goal: serve as an onramp for people to break into tech careers. Flockjay's core offering is a 10-week sales training bootcamp that helps place graduates into sales jobs across tech companies - about 80% of the company's students find a job within the first six months of graduation, the company said in January. The graduates of the course, otherwise known as Flockjay Tech Fellows, make an average of $75,000 upon graduation.
This core offering will continue to function but in a limited capacity for now, according to documents obtained by TechCrunch. It will come at a cost to diverse talent. In a previous interview, Flockjay confirmed that roughly 40% of students don't have a four-year college degree; half of the students identify as female or nonbinary, and half of the company's students identify as Black or Hispanic.
As Hathiramani's comment alludes to, the company has spent years training students on how to be competitive hires for sales teams, so assumedly, it has key insight on what tech companies need today from an infrastructure and human perspective. A B2B SaaS tool focused on sales operations and efficiency could bring Flockjay more predictable revenue and assumedly less labor-intensive work.
Want a job in tech? Flockjay pitches its sales training service as an on-ramp to tech careers
Layoffs could signal changing tides for the broader edtech industry, a sector revitalized by the pandemic. While it is true that learners shifted online, there are still questions around what purpose non-accredited training programs, such as Flockjay, serve, one investor said. With so many options in the market, users have optionality on what service they frequent - and the service may indeed be the one that has a flashy university partnership that validates their program and offers a safety net.
Flockjay's struggles also put a spotlight on the highly scrutinized income-share agreements, ISAs. The financial instrument essentially allows students to avoid paying upfront fees to attend a bootcamp, and then ultimately pay back class fees through a percentage of their future income. While ISAs play a role in making education more accessible in the beginning, satisfying those agreements post-employment can be where the controversy begins around liability. Lambda School, a well-known company in the tech bootcamp world, also uses ISAs. The startup announced that it would be doing a broader restructuring earlier this year, while also laying off 65 of its employees.
Flockjay has raised $11 million in known ventures and capital to date. Since its founding, the startup has attracted investments from Serena Williams, Gabrielle Union and Will Smith, along with institutional investors including Lightspeed, Coatue, Y Combinator, eVentures, Salesforce Ventures, the Impact America Fund and Cleo Capital.