But the company plans to continue to hire selectively for particular roles, especially technical ones (like the ones on its LinkedIn page). It told Fortune, which broke the story, that this move will keep its finances on track.
The company says bookings on the site will double this year from the previous one, and it recently touted to Tnooz about an improvement to its conversion rates thanks to geo-location targeting.
But, like many maturing startups, it has stopped talking about the 300% revenue growth rate of its early years.
CEO Sam Shank released a statement to Tnooz and other media companies:
“Today my leadership team and I made a decision to reduce our staff by 20% – 37 people. Decisions like this one are never easy, but they are necessary. At a startup especially, it’s critical that we have the right people in the right roles in order to stay on track, and hit our growth and revenue targets. But this is also a decision that affects people’s lives, and we’re painfully aware of that.
Compounding the difficulty of this decision is that we’ve built an amazing company culture here. We like each other and we spend time together, which made today’s move especially difficult. The people who left today made amazing contributions to our success, and we’ll miss them.
We’ve made plans to ensure they have as easy a transition as possible, including a generous exit package that will pay them through the end of the year.
This decision was hard, but it was also necessary: HotelTonight is now a more streamlined and focused company. We’re well-equipped to accomplish our mission to help people live a more spontaneous life. The business is doing very well: We grew over 100% in booking volume this year.
Word of mouth drives the majority of this growth, which tells me we’re achieving our goal to give people a fantastic experience. We’re on track to reach profitability next year. We’ll continue innovating and providing value to our customers and hotel partners.
Today’s decision was about about making the best choice for the company in the long term. This agonizing decision is also the right decision. We thank everyone at HotelTonight for your contributions, which have been invaluable, and wish you the very best.”
Phocuswright market research data shows that while the last-minute booking market is enormous, competition is getting fiercer.
To adapt, a year ago the San Francisco startup switched from its signature same-day booking model to a more flexible one, where users can book up to seven days in advance.
The startup’s fourth round of funding was in September 2013. It has raised about $80 million to date.
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