TripActions, the $4 billion Andreessen Horowitz-backed corporate travel startup, just laid off 350 employees as the travel industry grinds to a halt

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TripActions, the $4 billion Andreessen Horowitz-backed corporate travel startup, just laid off 350 employees as the travel industry grinds to a halt

TripActions CEO Ariel Cohen

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TripActions, the corporate travel startup backed by Andreessen Horowitz's massive $2.2 billion growth fund, laid off 350 employees across business divisions on Tuesday, Business Insider has learned.

The company had over 1,000 employees prior to the cuts, according to startup database PitchBook, which would mean that the layoffs affected roughly a third of its workforce.

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The startup, which was valued at $4 billion after the Andreessen-led funding round in June, took on a $500 million in debt financing on February 25 when it launched a travel credit card, a fateful decision announced just days before corporations around the globe curtailed business travel amid the developing coronavirus pandemic.

TripActions offered companies an all-in-one corporate travel service, first for booking corporate travel but eventually added services like expense tracking and reimbursements along with its corporate travel card. It vaulted to Silicon Valley fame by offering low-cost tools for other startups before winning larger contracts for established tech companies with seemingly endless travel budgets.

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"This global health crisis is unlike anything we've ever seen in our lifetimes, and our hearts go out to everyone impacted around the world, including our own customers, partners, suppliers, and employees," a corporate spokesperson told Business Insider in an emailed statement, in part. You can read the full statement below.

The cuts are the latest of the staff reductions sweeping Silicon Valley's startups as the economic impacts of the coronavirus pandemic come into better focus. Venture investors have already started dialing back aggressive investment plans while moving ahead with previously planned deals, and founders of late-stage startups are scrambling to make ends meet without additional cash reserves.

TripActions was especially vulnerable to the rapidly changing economic landscape many startups are just now coming to terms with because of its heavy reliance on business travel and startup customer base. The startup skyrocketed to unicorn status in near-record time, and aggressively expanded into new categories like banking that required larger investments for even larger returns.

Towards the end of 2019, many investors began pushing startups like TripActions to prioritize profitability over growth in the event of an economic downturn. Investors saw the tumult at rapid-growth darling WeWork, and the pressure it put on main backer SoftBank, as a cautionary tale. Now, many say that strategy shift was a prudent decision in preparing for the current economic uncertainty, but not every startup heeded the advice.

Layoffs have come to Silicon Valley in droves for the smallest startups all the way to household names. The hospitality industry has taken a large brunt of the cuts, with home-sharing startups like Sonder, Zeus, and Lyric announcing cuts this week. Even public companies are not immune, with tech giants like Google implementing promotion freezes and newer entrants like Uber halting new hires. As expected, the surge in newly unemployed Silicon Valley workers has led to new forums, message boards, and apps crowdsourcing new employment opportunities.

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Read TripActions' full statement:

"This global health crisis is unlike anything we've ever seen in our lifetimes, and our hearts go out to everyone impacted around the world, including our own customers, partners, suppliers, and employees.

The coronavirus has had wide-reaching effect on the global economy. Every business has been impacted including TripActions. While we were fortunate to have recently raised funding and secured debt financing, we are taking appropriate steps in our business to ensure we are here for our customers and their travelers long into the future.

We've cut back on all non-essential spend and made the very difficult decision to reduce our global workforce inline with the current climate. We look forward to when the strength of the global economy and business travel inevitably return and we can hire back our colleagues to rejoin us in our mission to make business travel effortless for our customers and users."

Get the latest coronavirus analysis and research from Business Insider Intelligence on how COVID-19 is impacting businesses.

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