Scoop: Layoffs at solar software startup Colossus
Colossus Energy, a startup that sells enterprise software to solar companies, laid off nearly 100 employees on May 6, Axios has learned.
Why it matters: Uncertainty abounds in the solar industry.
What's happening: Colossus cut 97 roles across sales, support, quality assurance and HR, according to a crowdsourced document helping affected employees search for new opportunities that Axios obtained.
- The bulk of cuts were across the company's call center representatives, the company confirmed to Axios.
- Rachel Andrus, the director of instructional design, was also among those let go.
- “The significant decision to close our call center operations was necessary to aggressively pursue growth opportunities in proven areas of our business,” Daniel Gloede, Colossus’ head of finance, tells Axios via email.
- “Earlier this month, we launched a digital solar marketplace to better serve our customers. This aligns with our focus on growing our sales enablement solutions.”
Between the lines: Sales team layoffs often come as a company struggles to attract and maintain customer contracts.
- Roughly a week after the layoffs, Gloede shared a CNBC story on LinkedIn about cost-cutting at Uber, writing, "Dara's letter to his team is one I suspect will be repeated many times over in the public markets over the coming months. Focus on unit economics, make hiring more selective, begin showing path to profitability. Startup CFOs need to have similar conversations with their founders."
Context: Colossus raised $36 million in Series A funding on January 18. BuildGroup led the round, which also included Capital Creek, RTP Global, CEAS and Poplar Ventures.
- The company has raised $41 million in funding to date.
State of play: The solar industry is dealing with multiple crises that threaten its long-term health.
- The Department of Commerce is currently pursuing an investigation into whether some solar panel suppliers in Asia violated U.S. trade barriers against China, cutting off a majority of the U.S. imported panel supply until the investigation is complete.
- Banks have stepped back from funding new power purchase agreements with solar plants under construction during the investigation, making large-scale plants riskier.
Meanwhile, privately funded companies are bracing for a pullback.
- VC investors are counseling their portfolio companies to rein in spending in preparation for harder times ahead.
- Startups and large tech companies alike have paused hiring or already reduced head count as one measure to get their spending under control.
Our thought bubble: Colossus is likely the first of many companies cutting head count in the weeks and months ahead.