Career Karma’s latest layoff underscores edtech’s new challenge •

by Ana Lopez

Learning navigation platform Career Karma has laid off another 22 people in its global and domestic workforce less than five months after it cut 60 staff, according to sources. CEO and co-founder Reuben Harris confirmed the workforce reduction to

The cut shows that while many edtech companies are trying to get their workforce right-sized, there’s more work to be done. Harris’ email to the remaining staff underscores today’s tension: Once-enthusiastic business customers are still deciding whether or not to sign up for new tools, leading to longer sales cycles and uncertainty.

“Last year we made the decision to properly size the company so we can orient Career Karma towards working with employers and now that we have started contracting clients it is clear we made the right decision,” wrote Harris in the email. “What’s unclear is how Fortune 1000 companies will respond to the macroeconomic environment and it’s important for us to give ourselves time to work with them to figure that out.” As the market evolves, Career Karma’s service to match employees or professionals with tech boot camps falls into a tough spot. Last month, BloomTech, a coding boot camp formerly known as Lambda School, laid off half of its staff to turn a profit.

During Career Karma’s latest cut, Harris stressed that the layoff and previously closed $40 million Series B would extend the startup’s runway to three years. After laying off staff this week, Career Karma has now run the catwalk for five years.

As has discussed in the past, the strategy of “lengthening your runway” always comes into play when investors slow down investing. Career Karma’s shift from the fundamental rule of thumb of three years to five years shows how that rule may become even more conservative as the recession continues. Over email, Harris tells that he “always [wants] to have the option to raise… I just don’t want to be forced to raise.”

With 80 employees still at Career Karma, Harris confirmed no C-suite executives were affected by the layoff. Those affected were offered two months of severance pay, as well as extensive benefits. Appropriately, the career navigation platform also provided career navigation support to its new alumni.

Current and former Career Karma employees can contact Natasha Mascarenhas on Signal, a secure encrypted messaging app, at 925 271 0912. You can also DM her on Twitter, @nmasc_.

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