Three years ago, note-taking app maker Evernote Inc. rose to an elite status among startups with a $1 billion valuation.
Now, Evernote is one of the few members of the billion-dollar club to pull back on its growth. On Tuesday, the company cut 47 employees, or 13% of its staff, and told staff it is plans to close its offices in Taiwan, Singapore and Moscow, a spokeswoman said.
“A smaller, more focused team today will set us up for growth and expansion tomorrow,” Mr. O’Neill said in blog post. “We will launch major foundational product improvements around the core features that you care about most, and we will pull back on initiatives that fail to support our mission.”
Evernote’s job cuts could serve as a warning to the more than 120 private companies now valued at $1 billion or more, even as an average of two private companies join that club every week.
Fab.com, an e-commerce startup valued at $1 billion in 2013, sold for a small fraction of that amount earlier this year, after the company grew too quickly overseas and burned through its cash. The company failed to right its course through several rounds of layoffs. Gilt Groupe also reportedly laid off about 10% of its workforce back in early 2012, not long after raising capital at a $1 billion valuation.
Evernote is shedding jobs as it attempts to transition from a popular consumer app to a paid subscription service used by professionals in more than 20,000 companies. Its paid subscribers, who pay up to $50 a year for more storage and additional features such as business card-scanning and presentation software, have increased 40% over the past year, Mr. O’Neill said in the post on Tuesday.
The startup shuttered one of its consumer-focused apps, a recipe-saving service called Evernote Food, this week. Its website still offers a wide range of products, including a Web-clipping service, moleskin notebooks and a scanner.
Phil Libin, who co-founded Evernote and served as its CEO for most of the company’s growth, this month joined VC firm General Catalyst Partners. He remains Evernote’s executive chairman.