2 more Utah tech companies — each valued at over $1B — lay off staff

“This has been the toughest decision we have made by far,” leadership at Route said.

(Chris Samuels | The Salt Lake Tribune) Podium headquarters in Lehi, Wednesday, Oct. 19, 2022. Podium recently announced internally that it would layoff 12% of its staff, Business Insider reported.

Two Silicon Slopes companies each recently valued at more than $1 billion have laid off staff, according to recent reporting and LinkedIn posts.

Neither company responded to requests for comment.

Route, which was founded in 2018 and works with e-commerce companies to track packages and direct shoppers to other potential purchases, laid off a portion of its staff Monday, according to at least 25 individuals who posted on LinkedIn about their experience of being let go from the company.

“This has been the toughest decision we have made by far,” the company’s chief technology officer wrote in a LinkedIn post.

On Tuesday, Route’s senior vice president of strategy wrote on LinkedIn, “Yesterday, Route had to conduct layoffs after what has been a whirlwind few years in eCommerce. Like many companies, we took these measures proactively to put the company in a position of strength in the coming years, but that meant parting ways with a lot of incredible people ...”

Route was poised to grow and add thousands of jobs over the next 11 years, the Utah Governor’s Office of Economic Opportunity announced in February 2021, announcing it had offered tax incentives worth more than $23 million if the company met the terms of its contract with the state. Route had roughly 500 to 600 employees, according to its LinkedIn page and Crunchbase profile.

Route hasn’t yet claimed any of those tax breaks, according to an economic development office database. It was valued at $1.25 billion in January, according to Forbes, because of booming online sales.

Podium, founded in 2014, laid off 12% of its staff Thursday, according to an internal memo reported by Business Insider. The company helps businesses communicate with customers via text messages and through chat boxes on businesses’ websites.

Podium, valued at over $3 billion in November 2021, did take up a tax incentive offer from the state. It was eligible to claim more than $1 million in tax rebates through an agreement, enacted in 2017, given it created 426 jobs over five years, according to the state database.

However, the database also shows that as of March, Podium had qualified for zero to 25% of the total tax credit that was originally offered.

Layoffs reduce the tax incentives offered to companies and can disqualify them from receiving a tax credit for a time period, Utah Governor’s Office of Economic Opportunity said.

Business Insider reported that Podium is also planning to reduce costs by slowing hiring, subleasing its office and spending less on software and perks.

“As founders of this business, we understand how painful and personal these changes are for all of you,” CEO Eric Rea and co-founder Dennis Steele wrote in the memo, according to Business Insider. “We accept full responsibility for the decisions that led us here, and we are incredibly sorry to have to make these necessary decisions.”

The memo noted that laid-off employees will receive six seek of severance pay and will pay health care premiums for existing employees through January.

The cuts come after a series of layoffs have rippled through Utah companies, particularly affecting tech positions. Last month Ocavu, which has partnered with Brigham Young University to make NFTs for the school’s athletics teams, cut its workforce in half and iFIT, owner of the NordicTrack exercise equipment brand, slashed hundreds of jobs. In October MX, which provides digital tools for working with financial data, laid off 200 employees and Homie, a real estate startup laid off 40 employees.

Clarification • Dec. 7, 2022, 10:30 a.m.: This story has been updated with additional information about the status of Podium’s tax credit incentives.