San Francisco software startup Zeplin has laid off 37 employees—roughly 35% of its workforce this week, according to a former employee. 

The company was founded in 2014 and offers a collaboration tool for designers, engineers and product managers. According to Crunchbase, the company raised $1.4 million in seed funding, including from entrepreneurs like Color Genomics co-founders Othman Laraki and Elad Gil.

Zeplin CEO Pelin Kenez and the company did not respond to requests for comment. 

According to the former employee, staffers were told at the company's regular all-hands meeting on Tuesday morning that there would be a workforce reduction. Impacted employees received a calendar invite where they were officially informed they were part of the job cuts. 

The job cuts particularly impacted the company’s sales and marketing team, although there were also layoffs in the design, product, support and HR divisions. 

Zeplin took part in the Y Combinator accelerator in 2015, which brought its four co-founders from Istanbul to the Bay Area. 

The company is one of numerous tech firms that has turned to layoffs to navigate a difficult environment for fundraising in the post-pandemic era. 

The Zeplin employee said that the company has been losing customers as it faces increasing competition from other collaborative design tools like Figma.

In a Slack message to the staff viewed by The Standard, Kenez referenced the all-hands meeting and wrote, “We unfortunately will have to say goodbye to many crew members today.”