Spa and salon software startup Zenoti makes small layoff as beauty industry faces COVID-19 upheaval

Spa and salon software startup Zenoti makes small layoff as beauty industry faces COVID-19 upheaval

Zenoti’s spa-management software was designed around mobile devices. (Zenoti Photo)

Zenoti, a 9-year-old Seattle startup that makes enterprise software for businesses in the beauty and wellness industry, has made a 3.5-percent cut to its worldwide staff of 500.

CEO Sudheer Koneru said Tuesday that the loss of about 17 employees was a strategic decision and that from a cash flow and financial perspective, at least so far, the impact of the coronavirus outbreak has been minimal for Zenoti.

Zenoti CEO Sudheer Koneru. (Zenoti Photo)

Zenoti services 900 brands representing 10,000 outlets, and its focus has always been on bigger brands such as Seattle-based Rudy’s Barbershop and Gene Juarez Salons & Spas.

“I think all of these larger brands will come right back because they have a very strong business and they’re vibrant in their local markets,” Koneru said.

And even when shut down to in-store customers, these larger businesses tend to use Zenoti’s platform for their entire operation, applying technology that allows them to still drive revenue, whether it’s through the sale of gift cards or retail product online.

Rudy’s, for instance, is running a Cut-Pack promotion during the closure of its shops which allows customers to pre-purchase haircuts at discount for use when they reopen.

In a post on Medium this week, Koneru wrote about the “tectonic transformation” that he anticipates in the beauty and wellness industry in the wake of COVID-19 due in large part to the personal and physical nature of the work.

Koneru said health, social, regulatory and economic pressures will pose a challenge to the industry, but technology can be a powerful force to counteract those pressures.

He cited online bookings, self-check-ins, automatic payments, and other features that serve to eliminate “unnecessary touch-interactions.”

“What are seeing in the market, is the bigger players can respond to these things,” Koneru told GeekWire. “They are able to drive cash. They’re able to do stuff. It is the small player who will struggle, who can’t make the rental payments and who can’t generate the cash.

“And when the industry opens, consumers will have expectations when they come into a store, and I think the bigger players will be quicker to lay out those standards, roll them out across their franchises,” he added. “They are already working on these things and will respond proactively.”

Zenoti is No. 41 on the GeekWire 200 ranked index of Pacific Northwest startups. The company raised $70 million in 2019 and its funding to date is more than $91 million.

Source: GeekWire

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