Flockjay Lays Off Half Its Staff, Shifts to B2B SaaS

Flockjay Undergoes Restructuring, Reduces Workforce

Flockjay, a company specializing in tech bootcamps designed to assist individuals seeking career transitions and those recently unemployed, has implemented a significant workforce reduction. This action accompanies a strategic shift towards a Business-to-Business (B2B) Software as a Service (SaaS) platform, as reported by sources familiar with the matter.

Impact of the Layoffs

The personnel cuts affected all departments within Flockjay excluding the technical teams. This included roles in admissions, business operations and development, partnerships, recruitment, and marketing. Approximately 30 to 45 employees were impacted during a company-wide meeting, representing at least half of the organization’s total staff. A list of those affected has been widely shared on LinkedIn.

CEO Statement on the Changes

Shaan Hathiramani, CEO of Flockjay, released a statement emphasizing the company’s commitment to its graduates’ long-term success. “Our core mission centers on not only helping our graduates secure employment, but also facilitating their advancement and development into future industry leaders,” Hathiramani stated. “Through our growth, we’ve recognized the importance of investing in scalable support systems for our alumni, their teams, and sales organizations aligned with our mission. This realization led to the challenging, yet essential, decision to operate our classes at a reduced capacity while we concentrate on developing this new platform.” He acknowledged the impact on the team, praising their talent and close-knit nature.

Flockjay’s Core Program and Success Rates

Flockjay initially emerged from Y Combinator in 2019 with the aim of providing an entry point into technology careers. The company’s primary offering is a ten-week sales training bootcamp. This program prepares graduates for sales positions within tech companies, with approximately 80% securing employment within six months of completion, according to data released in January. Graduates, known as Flockjay Tech Fellows, typically earn an average of $75,000 annually following the course.

Changes to Program Accessibility and Diversity

While the core bootcamp program will continue, it will operate at a limited capacity. Documents obtained by TechCrunch suggest this change may impact access for diverse talent. Previously, Flockjay reported that around 40% of its students do not possess a four-year college degree. Furthermore, half of the student body identifies as female or nonbinary, and half identify as Black or Hispanic.

Shift to a B2B SaaS Model

The company’s experience in training individuals for sales roles has provided valuable insights into the needs of tech companies regarding infrastructure and personnel. Consequently, Flockjay is developing a B2B SaaS tool focused on sales operations and efficiency. This transition is expected to generate more predictable revenue streams and potentially reduce labor intensity.

Broader Trends in the Edtech Industry

These layoffs may indicate evolving trends within the edtech sector, which experienced growth during the pandemic. Despite the shift to online learning, questions remain regarding the value proposition of non-accredited training programs like Flockjay, according to one investor. The abundance of options available to learners means they can choose services, potentially favoring those with established university partnerships for validation and security.

Income-Share Agreements Under Scrutiny

Flockjay’s situation also highlights the increasing scrutiny surrounding Income-Share Agreements (ISAs). These financial instruments allow students to defer tuition payments until they secure employment and then repay fees as a percentage of their future income. While ISAs can improve access to education, concerns exist regarding the potential liabilities associated with fulfilling these agreements post-employment. Lambda School, another prominent tech bootcamp, also utilizes ISAs and announced a restructuring and layoffs earlier this year.

Funding and Investors

To date, Flockjay has raised $11 million in funding from various sources. Notable investors include Serena Williams, Gabrielle Union, Will Smith, and institutional investors such as Lightspeed, Coatue, Y Combinator, eVentures, Salesforce Ventures, the Impact America Fund, and Cleo Capital.