Identity verification company Veriff, one of Estonia’s largest startups, filed a collective redundancy notice with the Unemployment Insurance Fund on 22 August, citing the difficult global market situation, Estonian newspaper Postimees reported.
According to the Unemployment Insurance Fund, the company plans to make 55 jobs redundant, mainly in Tallinn, with some job losses also in Tartu.
The company says the difficult global market situation is curbing growth opportunities for the tech sector.
“The growth rate of our current customers has slowed down significantly compared to the past and bringing new customers on board has also been significantly more time-consuming than we anticipated,” the company said.
Veriff admits its pace of recruitment in recent years has been too fast.
“Veriff’s fixed cost base increased in both 2022 and 2023 due to overly vigorous hiring, whereas the general economic environment has cooled and clients are more cautious about investing,” it said.
Letting go one fifth of the work force
In addition to the employees made redundant in Estonia, Veriff will lay off 46 people abroad, business newspaper Äripaev reported. In total, Veriff is cutting its workforce numbers by one-fifth.
Veriff also submitted a notice of collective redundancies to the Estonian Unemployment Insurance Fund in February this year, when 42 jobs were cut in Estonia. Of the Veriff ex-employees, 37 people have registered with the Unemployment Insurance Fund so far this year and 11 of them are still looking for a job.
Before the submission of the redundancy notice on Tuesday, a total of 330 people worked at Veriff. In the third quarter of last year, the company had almost 100 more people on its payroll – 427, figures available from the Tax and Customs Board show.
In January 2022, Veriff raised US$100 million from foreign venture capital funds, which boosted its valuation to US$1.5 billion and made it a unicorn. According to Startup Estonia, Veriff is the second largest startup in Estonia in terms of revenue. In the second quarter of this year, Veriff’s sales revenue amounted to more than €18 million, in which Veriff was second only to Bolt.
In 2022, Veriff’s revenue totaled €36.1 million and net loss to €32.9 million, which was covered by equity contributions from the parent company.