The $967 million startup DataStax, reported to be heading for IPO, laid off as many as 100 employees after a major management shakeup

Apigee

DataStax CEO Chet Kapoor, who joined the company late last year.

• In mid-December, the $967 million data management company DataStax faced a round of layoffs, impacting somewhere between 60 to 100 employees, three sources estimated.
• Late last year, DataStax hired former Apigee CEO Chet Kapoor, who took that company public and later sold it to Google, to replace Billy Bosworth as chief executive.
• Under Kapoor's leadership, DataStax will focus more on its cloud offerings and engaging with its developer community amid rising competition with tech titans like Amazon and Microsoft.
• The changes arrive as DataStax comes under significant competitive pressure: Amazon Web Services, the market-leading cloud platform, launched a service based on the same technology as DataStax's flagship product.
• "We do not comment on rumors and speculation," a DataStax spokesperson said.
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The $967 million data management startup DataStax, which was previously reported to be planning a 2019 IPO, faced a major round of layoffs right before Christmas, and shortly after a leadership shakeup that saw the arrival of a new CEO.

Somewhere between 60 to 100 people were laid off in mid-December, three sources close to the company estimated. According to Pitchbook, DataStax has about 500 employees. The professional services and customer success team were hit the hardest by the layoffs, sources said, and employees in the graph database, solutions engineering and sales teams were also impacted.

DataStax builds software using Apache Cassandra, a popular open source database that was originally started at Facebook. Internally, some DataStax employees believe the company was too slow to offer versions of its software that were optimized to run on cloud platforms like Amazon Web Services or Microsoft Azure, and that it was struggling to compete with those tech titans, who offer their own database products, four sources said.

The layoffs were driven from a change in direction under new CEO Chet Kapoor, who joined in October, to focus more on the company's cloud offerings, a source said. A key part of Kapoor's strategy is to build the company's appeal to developers and generate a loyal community of users as a bulwark against competitors, three sources said.

"We do not comment on rumors and speculation," a DataStax spokesperson said.

A new threat from Amazon

DataStax has had several leadership departures and changes in the past year, including another major round of layoffs. In July, the company laid off a little less than 10% of staff and moved some employees into new teams as part of a restructuring.

"This has been a time of tough decisions and we have done everything we can to transition these valued people with dignity and compassion," DataStax's former CEO Billy Bosworth and cofounder Jonathan Ellis wrote in a blog post at the time.

DataStax

DataStax CEO Billy Bosworth

In October, Kapoor, the former Apigee CEO known for taking that company public and later selling it to Google for $625 million, joined DataStax as chief exec, replacing Bosworth.

Since then, chief product officer Ed Anuff, chief financial officer Don Dixon, and chief strategy officer Sam Ramji, all former Apigee employees, have joined DataStax's leadership team.

Kapoor's tenure as CEO was quickly met with a new challenge to the company: Amazon Web Services, the market-leading cloud platform, in December launched a service based on Cassandra, the open source database software at the core of DataStax's flagship product.

"DataStax is the largest contributor of code, service, support, and training to the Apache Cassandra project and community, and we recognize the sign of a flourishing project is greater market attention and investment," Ellis said in a statement at the time. "With that, we welcome Amazon's news as another vehicle that accelerates Cassandra adoption."

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