Boston’s biggest AI startup faces firestorm of criticism

Dan Wright, CEO of DataRobot.DataRobot

With layoffs and cutbacks starting to roil the local tech scene, one startup is standing out — and not in a good way.

AI software company DataRobot in Boston laid off 7 percent of its workforce in May despite raising $300 million last year. Several other tech companies, including Esme Learning and Thrasio, have also reduced their workforces amid the rough economy and a downturn in financing opportunities.

But DataRobot stands out not just for layoffs, but for angering current and former employees and generating a firestorm of criticism on social media sites including LinkedIn and Glassdoor.

The first spark was when employees learned that the layoffs occurred a few days after the company held a retreat for top executives and salespeople at a resort in the British Virgin Islands. Then came a report from The Information that five top executives who had not been with the company for many years sold $32 million worth of stock in 2021 when the company’s valuation peaked at more than $6 billion.

Former principal data scientist Rajiv Shah, who left the company last year after four years, was among those criticizing the stock sales on LinkedIn. “I felt physically sick after reading this,” he wrote.

The stock sales were “repugnant behavior,” Shah said in an interview. Shah does not think the company’s current leadership will survive. “I do expect a change over the next year,” he said.

One of the company’s current senior directors of engineering, Kyrylo Perevozchykov, also posted on LinkedIn about his disappointment over the stock sales.

“That is a saddening news,” Perevozchykov wrote. “For an employee from 2014 that [is] just heartbreaking. I have no words. That is a big shame.”

DataRobot said the company supports employees giving candid feedback.

“We are committed to fostering an environment of trust and belonging for all our employees and to making sure that everyone on our team feels that they are being heard and valued for their contributions to the company,” a company spokesperson said in a statement to the Globe. “We are focused on executing on our strategic growth plan and continuing to deliver value for our growing customer base.”

Last month, the company said the layoffs were “a difficult but necessary step.”

The seeds of the current turmoil go back to March 2021 when cofounder and chief executive Jeremy Achin left the company in a dispute with some of his investors. DataRobot’s board put Dan Wright, former chief operating officer of California software developer AppDynamics, in charge.

But unknown to employees until this month, Wright was allowed to sell $20 million worth of his stock in the private company just after becoming CEO, according to The Information. Four other recently hired top executives, including the chief financial officer and chief legal officer, sold another $12.6 million later in 2021.

At an all-hands meeting last Thursday, Wright apologized, but dozens of employees flooded an internal Slack discussion to air their displeasure. “Employee attrition is now a very probable scenario,” one wrote in a message seen by the Globe.