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The most recent layoff at Career Karma highlights the new challenge for edtech

Navigational learning environment Less than five months after laying off 60 employees, Career Karma has reportedly fired off another 22 workers throughout its worldwide and local workforce. CEO and co-founder Ruben Harris confirmed the layoffs.

There is still more to be done, as this layoff demonstrates, even as many edtech businesses try to right-size their employees. Harris’s email to the surviving employees captures the tension of the present: formerly enthusiastic business clients are still debating whether or not to sign up for new products, resulting in protracted sales cycles and uncertainty.

Harris stated in the email, “Now that we have begun to sign clients it’s evident that we made the correct choice last year to appropriately size the firm so that we can centre Career Karma on working with employers.” It’s crucial that we allow ourselves time to engage with Fortune 1000 firms to find out how they’ll adapt to the macroeconomic climate, which is now unknown. Career Karma is in a precarious position as the market shifts because of the nature of its business. Code school BloomTech (formerly Lambda School) let off half of its workforce only last month in an effort to turn a profit.

During the most recent round of layoffs at Career Karma, CEO Adam Harris stressed that the company now had three years of runway thanks to a $40 million Series B round that had just completed. Today’s round of layoffs gives Career Karma’s founders five more years to build the company.

Reported that anytime investment slows, the “stretching your runway” method becomes popular. The fact that Career Karma has increased the standard three-year rule of thumb to five years indicates that this guideline may become even more cautious if the recession persists. When asked by TechCrunch via email, Harris said, “I always [want] to have the choice to raise, I just don’t want to be compelled to raise.”

Despite the layoffs, Harris has verified that none of Career Karma’s C-suite executives were among the 80 employees that were let go. A two-month severance package and extended benefits were provided to those affected. Career guidance was also made available to recent graduates through the app.