HotelTonight CEO Sam Shank (pictured above) said the hotel booking startup laid off 37 employees today, 20 percent of its total workforce.
Shank described the cuts as “a strategic movement that will enable us to reach our growth and revenue targets” and said they will result in “a more streamlined and focused company.” At the same time, he was quick to add, “This was difficult. It affects people’s lives. We’re very painfully aware of that.”
He declined to offer more details about which areas of the company were affected, but he said this should not change HotelTonight’s overall direction or the experience of customers and hotel partners. Shank also said that HotelTonight is on track to double bookings this year compared to 2014, that it will become profitable next year and that it will continue hiring.
As the name implies, HotelTonight started out in 2010 as a mobile-focused, same-day hotel reservation app before adding seven-day booking options last year. It raised more than $80 million in venture funding. The most recent round was a $45 million Series D in 2013.
Shank sent me an emailed statement echoing the points he made during our interview:
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.